Morning Minute — Tyler Warner (opinions my own, not Decrypt). Also: check our new five-minute daily news show, available on Apple Podcasts and Spotify.
GM. Quick read:
The market got the soft inflation print it’s been hoping for — and crypto ripped higher on the news.
What happened
- June CPI fell 0.4% month-over-month, the largest monthly drop since April 2020. That pushed the annual CPI rate down to 3.5% from May’s 4.2%, beating the 3.8% consensus.
- Core CPI cooled to 2.6% and was essentially flat for the month.
Crypto reaction
- Bitcoin jumped from roughly $62,000 to reclaim about $64,900 within minutes.
- Ether surged roughly 7% to $1,884.
- An estimated $300 million of short positions were liquidated as bears were squeezed.
Why it matters
- This was the last major inflation reading before the Fed’s July 28–29 meeting, and the softer print weakens the near-term case for more aggressive tightening that’s capped risk assets this summer.
- Still, market-implied bets shifted: Polymarket’s odds of a July rate cut plunged from 35% to about 6% after the CPI release and Federal Reserve commentary. The chance of at least one rate hike by year-end is still near ~80% (down from ~90%).
Fed Chair Warsh’s testimony
- Within hours of the CPI release, Fed Chair Kevin Warsh made his first Congressional appearance since replacing Powell. He struck a confident, long-term tone: “If we get policy right—and we will—the inflation surge of the last five years will be a thing of the past.”
- Warsh highlighted business investment — particularly in AI — as a defining economic theme and suggested that “AI investment” will soon just be called “investment,” framing it as disinflationary.
- He pushed back on reading today’s CPI as a finished victory: when asked if the data meant “mission accomplished,” he replied flatly, “that is not my view.” He gave no forward guidance and reiterated the committee has “no tolerance” for persistently elevated inflation.
Takeaway
- The CPI print sparked a strong short-covering rally in crypto, but the Fed’s tone was cautious. Some will read Warsh’s comments as hawkish, leaving the possibility of additional tightening alive into 2026. Traders will be watching the FOMC in two weeks for clearer guidance. Until then: enjoy the pump.
Also today: coverage on corporate treasuries & ETFs, plus our Meme Coin Tracker.
Read more AI-generated news on: undefined/news
