🔥 Fed Cuts Rates Soon: Bitcoin Holding Steady, Trump's 1 BTC Selfie

Good Morning!

Asian stocks and currencies are tanking, with the MSCI Asia Pacific Index down 1%. Chinese stocks lead the nosedive after a disappointing Third Plenum. Tech's hurting on U.S. chip restriction fears. Oil's slipping on Chinese growth concerns, while gold's rally loses steam. Meanwhile, softer inflation in Japan and rising U.S. jobless claims are stirring the pot. It's a rough day across the board, folks!

In today’s email:

• Fed Watch: Poised for rate cuts this September

• Bitcoin: Holding steady below $65k

• Trump: 1 BTC for a selfie with Trump

• Tornado Cash: Surging despite sanctions

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THE BIG IDEA

The Federal Reserve is poised to cut interest rates in September, shifting focus from inflation to job market risks amid political pressure and economic uncertainty

Hold onto your portfolios – the Fed's about to make a seismic shift. After two years of waging war on inflation, our central banking maestros are ready to change tunes. The target? A September rate cut that's got Wall Street's collective heart racing.

Jerome Powell and his crew are increasingly confident they've wrestled inflation into submission. The Fed's preferred gauge has cooled to 2.6%, tantalizingly close to their 2% goal. But here's the plot twist – they're not just playing whack-a-mole with prices anymore. Powell's made it crystal clear: "It's not just about getting inflation down. We need to be mindful of where the labor market is."

And boy, is that labor market sending mixed signals. While still "strong" by Fed-speak standards, there are whispers of a turning tide. Job openings are dwindling, unemployment's ticking up (now at 4.1%), and wage growth is losing its mojo. It's like watching a high-wire act – the Fed's trying to nail that elusive "soft landing" for the economy without toppling into a full-blown recession.

Fed Governor Christopher Waller summed it up: "I do believe we are getting closer to the time when a cut in the policy rate is warranted"

The labor market's in a "sweet spot," but keeping it there is the trillion-dollar challenge.

Here's where it gets spicy – we're talking about rate cuts mere months before a presidential election. Cue the political fireworks! Some Republicans are already crying foul, but the Fed's sticking to its "we don't do politics" mantra. They've even included a special section on independence in their recent report to Congress. Talk about drawing a line in the sand!

But don't mark your calendars just yet. The Fed's still playing it coy, emphasizing that more data is needed before they pull the trigger. As New York Fed President John Williams put it, "We're actually going to learn a lot between July and September."

The next few months promise to be a wild economic ride. Will the Fed stick the landing? Can they navigate the political minefield? And most importantly, what does this mean for your wallet? Stay tuned – this financial soap opera is just heating up, and trust me, you won't want to miss a single episode.

MARKETS AT A GLANCE

TOP NEWS

Biden's grip on Democratic nomination weakens amid mounting pressure to drop out

President Biden's facing a political storm. Top Democrats are reportedly urging him to step aside, with former President Obama allegedly doubting his chances. Biden's COVID-19 isolation isn't helping matters. His team insists he's still in the race, but the pressure's mounting. Even longtime allies are acknowledging his dwindling support. Is this the beginning of the end for Biden 2024?

Dollar surges as global currencies slide, driven by reassessment of Trump's comments

The greenback's flexing its muscles! The Dollar Spot Index jumped 0.5% Thursday, its biggest leap since June. Traders are reassessing Trump's claim that a strong dollar burdens the U.S. economy. The euro dipped 0.4%, yen nosedived 0.8%, and Mexican peso plummeted 2%. Blame haven demand, rising yields, and commercial hedging for this forex frenzy.

Trump's crypto-fundraiser sets high prices for access at Bitcoin Conference

Trump's cozying up to crypto! He's hosting a fundraiser at the Bitcoin Conference with eye-watering price tags. $844,600 for a roundtable seat, $60,000 for a selfie. Talk about digital gold rush! Special guests include JD Vance and Vivek Ramaswamy. It's a far cry from Trump's 2019 crypto skepticism. Is this the dawn of a new, Bitcoin-friendly GOP?

CRYPTO

Crypto chaos in Asia - WazirX hack, tax hopes in India, and North Korean laundering schemes

Asia's crypto scene is on fire! WazirX lost $235M in a hack prepped days in advance. India's crypto industry is praying for tax relief in the upcoming budget. Hong Kong's seeing a rise in fake cash for USDT scams. South Korea's new crypto laws could land insider traders in prison for life. And North Korean hackers are allegedly laundering millions through a Cambodian marketplace.

Tornado Cash sees $1.9B surge in deposits despite sanctions and legal troubles

The controversial crypto mixer Tornado Cash is making a comeback. Deposits have skyrocketed 50% in just six months, hitting $1.9B. This, despite OFAC sanctions and founders facing legal heat. Hackers are loving it, using it to launder millions from recent exploits. Meanwhile, the crypto industry's fighting back, claiming the sanctions are unconstitutional. Talk about a financial tornado!

Italian state-owned bank tests $27.2M digital bond on Polygon blockchain

Italy's jumping on the blockchain bandwagon! Cassa Depositi e Prestiti, a $520B state-owned bank, just issued a $27.2M digital bond on Polygon. It's part of an ECB trial to explore blockchain for central bank money settlement. The bond matures in four months with a 3.63% coupon. Is this the future of finance? BlackRock's CEO thinks so, but skeptics warn of blockchain's fragility. The tokenization race is on.

Pixelverse's PIXFI token surges 50% post-airdrop, hitting $200M market cap

Crypto's got a new hot token. Pixelverse's PIXFI just launched with a bang, jumping 50% in its first hours. The NFT gaming platform on TON airdropped 10% of tokens to its NFT holders. To avoid dump-and-runs, they've got a clever staking system with hefty withdrawal penalties. With PixelTap's 50 million new users in June, this could be the next big thing in Web3 gaming.

GOLD

Gold hits record $2,484 before retreating; China's appetite for gold remains strong

Gold's on a rollercoaster. It touched a new record of $2,484 before pulling back to $2,456. The real story? China's still hungry for the yellow metal. Reports suggest they want to boost reserves from 4.9% to 10% - that's a whopping $170 billion worth! But they're not buying at any price anymore. This could put a floor under gold but also cap its upside. Miners, take note!

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