🔥 Powell's Dovish Shot: Bitcoin and Gold Skyrocket 🚀

Good Morning!

Powell's latest remarks have markets buzzing. The Fed Chair's cautious optimism on inflation has traders betting on a September rate cut. Meanwhile, Trump's RNC entrance after surviving an assassination attempt is fueling "Trump-victory trades." Cryptocurrencies are surging, gold's flirting with record highs, and the yield curve's steepening. Europe's bracing for a muted start, with luxury stocks under pressure after Burberry's gloomy forecast. All eyes on Powell and Trump as they continue to drive market moves.

In today’s email:

• J-Pow: Inflation on point, rate cuts soon?

• Bitcoin: Taking a breather here right around $63k after ripping up

• Gold: Near record highs, ready for next leg up?

• Crypto: Altcoins getting ready to 🚀

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THE BIG IDEA

Powell's comments suggest growing confidence in inflation control, hinting at potential rate cuts while balancing employment concerns

Fed Chair Jerome Powell's latest remarks are turning heads on Wall Street. He's painting a picture of an economy that's finally catching its breath after a marathon inflation sprint. Those three recent inflation readings? They're music to Powell's ears, adding "somewhat" to the Fed's confidence that we're on track to hit that sweet 2% target.

But don't break out the champagne just yet. Powell's playing it cool, avoiding any explicit promises about rate cuts. He's walking a tightrope, balancing inflation fears with growing concerns about job market softening. It's a delicate dance, and Powell's trying not to step on any toes.

The labor market, once hotter than a summer sidewalk, is now just comfortably warm. Powell's shifted from "inflation, inflation, inflation" to a more balanced view of risks. It's like he's finally remembered the Fed has two jobs, not just one.

Wall Street's betting big on rate cuts, with at least two expected before 2024 bows out. September's looking like the chosen month, but Powell's keeping his cards close to his chest.

As for the neutral rate?

Powell thinks it's higher than in the pre-pandemic era. Translation: get used to higher rates, folks. It's the new normal.

In true central banker fashion, Powell dodged questions about his future plans. Will he stick around past 2026? Your guess is as good as mine. One thing's for sure: Powell's words will keep markets on their toes for the foreseeable future.

Trump's close call? Powell's not touching that with a ten-foot pole, beyond condemning the violence. But he did drop a truth bomb about our budget - it's as sustainable as a chocolate teapot.

Markets barely blinked at Powell's chat. Seems like Wall Street's heard this tune before. Stocks are still reaching for the stars, while Treasury yields are doing a little happy dance.

MARKETS AT A GLANCE

TOP NEWS

G7 debt levels spark market concerns as elections loom and fiscal outlooks blur

The G7's debt mountain is giving investors vertigo. France's bonds took a nosedive after a surprise election, while Uncle Sam's debt is under the microscope with Trump 2.0 on the horizon. Italy's playing fiscal Jenga, the UK's post-Boris hangover lingers, and Japan's debt-to-GDP ratio is off the charts. It's a global game of financial hot potato, and nobody wants to get burned.

China's new affordable housing push aims to address multiple economic challenges simultaneously

Beijing's latest property rescue plan is a multitasking marvel. Cities are expanding eligibility for subsidized housing beyond low-income groups, targeting doctors, teachers, and even scientists. It's a clever move to tackle brain drain, labor shortages, and sluggish consumer demand all at once. But will the apartments be up to snuff? That's the million-yuan question. This could be China's economic Swiss Army knife – if they play their cards right.

Japan remains vigilant against sharp yen falls, hinting at possible intervention

Tokyo's keeping currency traders on their toes. Chief Cabinet Secretary Hayashi's warning against "excessive volatility" is central banker speak for "we're watching you." Suspected intervention last week has the yen yo-yoing around the 160 mark – authorities' apparent red line. With the weak yen squeezing consumers, Japan's finger's on the trigger. Will they pull it again? Stay tuned for the next episode of "Forex Wars: Tokyo Drift."

CRYPTO

Bitcoin investment products see significant inflows as political and economic factors boost cryptocurrency appeal

Crypto's on a hot streak! Bitcoin funds raked in a cool $1.35 billion last week, marking three straight weeks of inflows. BlackRock and Fidelity are leading the charge, while Grayscale's bleeding cash. Ether's not far behind, riding the ETF approval hype train. Even the altcoin underdogs are getting some love. Looks like inflation jitters and political drama are turning digital gold into a safe haven.

Analysts spot signs of potential altcoin rally, but Bitcoin still dominates the crypto market

Altcoin enthusiasts, get ready! Crypto analysts are spotting signals of a possible altcoin surge. The Altseason Indicator hit a 10% low, historically a springboard for altcoin rallies. With daily active users up 97% year-to-date, the stage seems set. But hold your horses – Bitcoin's still the big cheese with 54% market dominance. We're not in altseason yet, but the winds of change are blowing.

Coinbase narrows subpoena request, now targeting Gensler's communications during his SEC tenure

Coinbase is playing legal chess with the SEC. They've dialed back their subpoena, now focusing on Gensler's communications since he became SEC Chair in 2021. It's a strategic move after the judge raised eyebrows at their original request for pre-Chair emails. The crypto exchange is gearing up for a showdown, arguing listed tokens aren't securities. With the opening brief due July 23, this legal thriller is just heating up.

Plaintiffs amend lawsuit against Tether and Bitfinex, alleging crypto market manipulation through unbacked USDT

The Tether-Bitfinex legal saga just got spicier. Plaintiffs have revamped their complaint, accusing the crypto heavyweights of a "sophisticated scheme" to inflate crypto prices using unbacked USDT. They claim Tether printed billions out of thin air, causing "billions of dollars of damage" to innocent crypto buyers. Tether's calling it a Hail Mary pass in a failing case. With expert analysis backing the claims, this crypto courtroom drama is far from over.

GOLD

Gold nears record high as markets anticipate Fed rate cuts and political uncertainty looms

The yellow metal's flirting with its all-time high, buoyed by growing bets on Fed rate cuts. With inflation cooling, traders are eyeing three potential cuts this year. Powell's dovish coos and Trump's close call are adding extra shine. Gold's now just $11 shy of its May peak, trading around $2,430 an ounce. It's a golden age for bullion bulls, but will it break the record? Stay tuned!

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