The Pre-CPI Setup

430: CPI Print, Ethereum Bid, DC Crime Response

Morning all.

Welcome to 500+ new subscribers who have joined us since last Friday. Always a surge of interest when the market moves quickly, since folks are obviously trying to take advantage of the opportunity to print fat bandos.

Saturday I put out a rare urgent post to touch on the breaking price moves, Ethereum pumps, and institutional buys taking place. I would informally list the past weekend as the official spark that might give us alt season in the coming weeks or months. The move from Ethereum put quite a few bear arguments to rest and reignited hopes that this bull cycle is going to continue through the end of 2025.

If you missed it or didn’t get a chance to read it — I highly suggest doing so. Even if you missed the 10-15 posts leading up to this weekend’s big move in crypto or the episode of Risk On in which I told you what was about to happen, you should be able to get relatively up to speed if you read this and this morning’s post.

No excuse at this point to not take advantage of these opportunities.

We don’t only talk about crypto here, but when the money is flowing it’s flowing and we’re going to follow it.

No use in talking about some random consumer stock that is up 3% when Ethereum and Chainlink are up 35% in a few days. No use in obsessing over how rate cuts will impact one stock or industry when you have the largest financial institutions on earth adopting blockchain and tokenization in front of our faces.

One critical point I mentioned on Saturday.

Before this little CPI induced fear dip — Bitcoin was able to run AGAIN after Ethereum put in its face melter.

THIS IS GOOD.

This is exactly what we wanted to see and likely confirms we are going to get a longer duration run from the broader market. We’ll talk about the other major debates/themes about market action a bit later today.

Today we need to expand the scope of what we cover. We have some significant economic data dropping today, new on chain developments that might tell us what tokens are going to continue pumping (or not pump at all), and there’s some relevant geopolitics news to touch on as well, both in the US and abroad.

Anyways before we get into it if anyone needs a Tuesday morning morale boost, I present to you Arizona State University’s Alpha Phi sorority recruitment video. Pairs well with 4 shots of espresso.

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Markets & Equities

Today’s release is the July CPI report, coming out at 8:30 AM ET. Markets are expecting about a 0.2% monthly gain and 2.8% annual rate for headline inflation, with core inflation projected at roughly 0.3% month-over-month and 3.0% year-over-year.

This will be the main driver of market action today for equities and crypto.

Today’s CPI release is one of the last major inflation reads before the September Fed meeting and could significantly sway rate cut odds. A hotter-than-expected print likely pushes the Fed to delay easing, as it would suggest inflation progress is stalling and could send yields and the dollar higher.

An in-line result would probably keep a September cut in play but not guaranteed, while a softer reading would all but lock in at least a 25 bps cut potentially even reviving talks of a larger move by reinforcing the view that inflation is no longer the main constraint on policy. And “tariffs” were never as detrimental as Jerome said.

Bottom line?