The ongoing digitalization of finance represents a pronounced trend marked by the widespread adoption of digital technologies within financial services, encompassing realms such as fintech and cryptocurrencies. This shift has prompted a corresponding influence on policy, with a focus on the development of regulatory frameworks aimed at safeguarding financial stability, ensuring consumer protection, and mitigating the risks of illicit activities within the digital financial landscape. Policymakers are actively engaged in formulating measures that balance innovation and security, seeking to harness the benefits of technological advancements while addressing potential challenges and safeguarding the interests of both financial institutions and consumers.
The most obvious U.S. macroeconomic trend to influence U.S. Federal policy, in the form of both the Inflation Reduction Act, and the steep 2023-23 assent of the Federal Funds rate, is the post-COVID spike of core and broad Personal Consumption Expenditure (PCE). Now that January 2024 BEA data tie clean ‘2-handles’ onto the core and broad U.S. PCE, that opens the door to future reconsideration of Federal monetary tightening.