GM — Tyler Warner here with Morning Minute. My analysis is my own and doesn’t necessarily reflect Decrypt. Also: check our new five-minute daily news show on Apple Podcasts and Spotify.
Top story — Crypto rips on unexpectedly cool CPI, but Fed’s new chair won’t call it a win
What happened
- June CPI came in softer than expected: -0.4% month‑over‑month (the largest monthly drop since April 2020), taking annual CPI to 3.5% from May’s 4.2% (consensus 3.8%).
- Core CPI cooled to 2.6% year‑over‑year and was flat on the month.
Immediate market reaction
- Crypto spiked almost immediately: Bitcoin jumped from about $62,000 to reclaim ~$64,900, Ether rallied ~7% to $1,884, and roughly $300 million in short positions were liquidated as bears got run over.
- The print undercuts the rate‑hike narrative that’s been capping markets this summer — at least for the moment.
Fed and the outlook
- This was the last major inflation read before the Fed’s July 28–29 meeting, so it matters.
- Betting markets shifted: the chance of a July rate cut on Polymarket fell from ~35% to ~6% after the CPI print and Fed commentary, while the probability of at least one hike by year‑end is still about 80% (down from ~90%).
Kevin Warsh’s testimony
- Fed Chair Kevin Warsh made his first appearance since taking over from Powell. Key lines:
- “If we get policy right—and we will—the inflation surge of the last five years will be a thing of the past.”
- He emphasized AI and business investment, calling “AI investment” likely to just be called “investment” and framing it as disinflationary.
- He also stressed the Fed has “no tolerance for persistently elevated inflation.”
- When asked about this morning’s cool CPI, Warsh rejected a “mission accomplished” reading and gave no forward guidance or signal on the next move — a tone some (including me) read as somewhat hawkish. A rate hike in 2026 still looks possible; FOMC in two weeks will be telling.
Bottom line
- The CPI print ignited a classic risk-on move in crypto, but Fed rhetoric keeps uncertainty alive. Enjoy the pump — but keep an eye on the Fed.
Also today: Corporate Treasuries & ETFs, Meme Coin Tracker.
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