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Jackson Hole looms: Can Powell save markets from a global risk meltdown?

Anndy Lian
Jackson Hole looms: Can Powell save markets from a global risk meltdown?

The global financial landscape presented a picture of cautious stability, with investors navigating a mix of easing geopolitical tensions and lingering uncertainties ahead of the Federal Reserve’s Jackson Hole symposium later in the week. Risk sentiment held steady, buoyed by slight improvements in US fiscal outlooks and a softening of immediate concerns over international conflicts, particularly in Ukraine.

President Donald Trump’s recent affirmations of support for Ukraine, coupled with optimistic remarks about a potential summit between Russian President Vladimir Putin and Ukrainian President Volodymyr Zelenskiy, contributed to a modest dip in Brent crude oil prices, which fell 1.2 per cent amid growing hopes for a ceasefire.

This development rippled through energy markets, underscoring how diplomatic signals can swiftly influence commodity valuations in an interconnected world. The broader narrative remained fixated on the Fed’s upcoming gathering, where Chair Jerome Powell’s speech could provide critical clues about interest rate trajectories amid a slowing but resilient US economy.

In the US equity markets, the session unfolded with a tech-led retreat that highlighted vulnerabilities in an index heavily reliant on a handful of megacap names. The S&P 500 closed down 0.59 per cent at around 6414 points, erasing some of the gains from the previous week’s rebound and snapping a brief streak of optimism.

The Nasdaq Composite bore the brunt of the selling pressure, tumbling 1.46 per cent as investors rotated out of high-growth technology stocks amid fresh doubts about the sustainability of the artificial intelligence boom. Nvidia, a bellwether for the sector, plunged 3.5 per cent, dragging down peers and exposing the market’s narrow breadth despite over 350 S&P constituents posting gains; the index’s fate hinged on a few giants.

In contrast, the Dow Jones Industrial Average eked out a marginal 0.02 per cent increase, supported by resilient performances in non-tech sectors like retail, where Home Depot’s earnings provided a lift. This divergence illustrated a market grappling with rotation themes, as value-oriented and cyclical stocks attempted to reclaim ground from the growth darlings that have dominated 2025’s narrative.

Bond markets offered a counterpoint of calm, with US Treasury yields dipping as traders sought safety. The two-year note yield declined two basis points to 3.75 per cent. In comparison, the benchmark 10-year yield fell 3 basis points to 4.30 per cent, reflecting tempered expectations for aggressive Fed tightening in light of recent data showing inflation pressures easing but not vanishing entirely.

Currency and commodity dynamics further painted a picture of measured adjustment rather than outright panic. The US Dollar Index edged up 0.1 per cent, steadying against a basket of peers as investors weighed the implications of a potentially hawkish Fed stance against global growth concerns.

Gold, often a haven in turbulent times, slipped 0.4 per cent, suggesting that immediate fears of escalation were subdued. Brent crude’s decline, driven by those ceasefire prospects, marked a shift from the volatility seen earlier in the year when energy prices spiked on supply disruption fears.

Trump’s reiteration of US backing for Ukraine, while expressing hope for dialogue, added a layer of geopolitical nuance that markets interpreted as de-escalatory, at least for now. These movements came against a backdrop of broader economic indicators, including a mixed bag from China’s data; retail sales slowed to 3.7 per cent in July, while property investment sank 12 per cent. Exports held firm despite US tariff pressures.

Across the Pacific, Asian equities mirrored the global caution, mainly closing lower in a session characterised by narrow ranges and selective buying. Taiwan’s Taiex fell 0.53 per cent, and South Korea’s Kospi dropped 0.81 per cent, reflecting tech sector weakness that echoed the Nasdaq’s woes, given the region’s heavy exposure to semiconductor supply chains. However, India bucked the trend, with the Sensex rising 0.46 per cent on continued momentum from weekend announcements of indirect tax cuts aimed at boosting consumer spending.

These measures, including income tax rebates totalling 1 trillion rupees, have invigorated urban households and supported sectors like retail lending and consumer discretionary goods. Early trading in Asia pointed to further softness, with US equity futures implying a lower open stateside, perpetuating the risk-off tone.

This regional performance aligns with a year where Asian markets have shown resilience amid trade tensions, with valuations remaining attractive compared to developed peers. Asia ex-Japan trades at a discount, offering entry points for long-term investors amid stable inflation and proactive fiscal policies.

The cryptocurrency space, however, stole headlines with Bitcoin’s sharp descent below US$113,000, the first such breach in over two weeks, triggering US$113 million in leveraged long position liquidations and sparking debates about the end of the bull run. From its all-time high of US$124,176 just days prior, BTC’s nine per cent plunge reflected a confluence of factors: profit-taking after a euphoric surge, mounting macroeconomic uncertainties, and a broader risk-off sentiment amplified by Trump’s trade policies and Fed ambiguity.

On-chain data revealed short-term holders selling at losses for the first time since January, with net exchange outflows of 3.4K BTC daily signaling potential capitulation. Analysts like those at The Block noted repositioning ahead of Powell’s Jackson Hole address, while Forbes warned of deeper corrections if support at US$110,530 fails.

Social media buzzed with mixed reactions—some X users viewed it as a healthy reset, others feared a 70 per cent drop to US$23K-US$43K based on bearish RSI divergences. Whales appeared to buy the dip, and ETF inflows of US$17 billion in BTC and ETH over the past 60 days suggested institutional interest persists, potentially cushioning further downside.

Compounding Bitcoin’s woes was news of a US Securities and Exchange Commission probe into Alt5 Sigma, a firm entangled in a US$1.5 billion partnership with Trump-backed World Liberty Financial. The investigation centers on allegations of fraud, stock manipulation, and earnings inflation involving Alt5’s president, Jon Isaac, who claims that surfaced amid insider share sales during price surges.

World Liberty, positioning itself as a DeFi and stablecoin platform with Trump as “co-founder emeritus,” raised US$550 million via token sales, and the former president disclosed US$57.4 million in earnings from his stake. Eric Trump is set to join Alt5’s board, deepening the family’s ties. Alt5 clarified that Isaac is not its president and denied knowledge of any SEC inquiry, but the reports triggered a sharp drop in its stock. This scandal rippled through crypto sentiment, exacerbating the Nasdaq’s 1.5 per cent fall and linking political intrigue to market volatility.

Adding fuel to the tech correction was a sobering MIT NANDA report, revealing that 95 per cent of companies fail to achieve rapid revenue growth from AI pilots, based on 150 corporate interviews and 300 deployments. The study highlighted a “GenAI Divide,” with most efforts stalling due to integration challenges, hesitancy in solo implementations, and over half of 2025 AI budgets funneled into sales and marketing without proportional returns. This revelation triggered sell-offs in AI-linked stocks, amplifying doubts about the hype cycle and contributing to the Nasdaq’s woes.

From my vantage, who has chronicled market cycles for years, this day’s events underscore a pivotal inflection point. The Bitcoin plunge and SEC scrutiny on Trump-linked crypto ventures highlight the perils of intertwining politics with speculative assets. World Liberty’s rapid fundraising and high-profile ties risk amplifying regulatory backlash, potentially eroding trust in an industry still recovering from past scandals. While Trump’s involvement has injected visibility, it also invites scrutiny that could deter mainstream adoption.

On AI, the MIT findings validate growing skepticism about an overhyped revolution; with 95 per cent failure rates, we’re witnessing echoes of past tech bubbles, where promise outpaces delivery. I remain cautiously optimistic: markets have absorbed tariff shocks before, and Asia’s undervalued equities, bolstered by domestic stimulus like India’s tax cuts, offer diversification amid US concentration risks.

The Jackson Hole meeting could catalyse a rebound if Powell signals dovish intent, but investors must brace for volatility. Focusing on fundamentals over frenzy will separate winners from the washout. In a world where geopolitical whispers move billions, resilience lies in balanced portfolios that weather these storms, not chase fleeting highs.

 

Source: https://e27.co/jackson-hole-looms-can-powell-save-markets-from-a-global-risk-meltdown-20250820/

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Global markets freeze as Trump-Putin summit fails: What’s next?

Anndy Lian
Global markets freeze as Trump-Putin summit fails: What’s next?

The muted risk sentiment stems mainly from the fading prospects of a swift resolution to the Russia-Ukraine conflict, a situation exacerbated by President Donald Trump’s recent comments during a press briefing following his summit with Russian President Vladimir Putin.

Trump explicitly stated that a ceasefire remains out of reach for now, emphasising the complexities involved in negotiations. This remark came on the heels of their meeting in Anchorage, Alaska, last Friday, where discussions centred on the ongoing war but yielded no concrete agreements, leaving markets on edge as they anticipate potential ripple effects on energy prices and supply chains.

The summit itself unfolded at Joint Base Elmendorf-Richardson, with both leaders exchanging cordial greetings yet parting without breakthroughs on key issues like territorial concessions or security guarantees for Ukraine. Putin described the talks as productive, highlighting areas of mutual interest, while Trump later conveyed to Ukrainian President Volodymyr Zelenskyy that Putin seeks further gains, urging Kyiv to consider a deal.

Zelenskyy’s subsequent trip to Washington for direct talks with Trump underscores the urgency, but the absence of immediate progress has dampened hopes that had built up in recent weeks. This impasse reflects a broader pattern in international relations under Trump’s second term: a pragmatic, deal-oriented approach that prioritizes American interests but often prolongs uncertainty.

Investors respond to such developments with hesitation, as prolonged instability in Eastern Europe threatens to disrupt global trade routes and inflate commodity costs, particularly for energy-dependent economies. I believe this situation demands vigilance, as any escalation could trigger sharper market corrections than the sideways trading we witnessed yesterday.

Turning to the financial markets, US equities exhibited a lack of direction on Monday, with the S&P 500 edging down by a mere 0.01 per cent, the NASDAQ Composite inching up 0.03 per cent, and the Dow Jones Industrial Average slipping 0.08 per cent. Traders adopted a wait-and-see posture ahead of upcoming retail earnings from major players like Walmart and Home Depot, alongside Federal Reserve Chair Jerome Powell’s highly anticipated address at the Jackson Hole Economic Symposium later this week.

Powell’s remarks could provide clarity on interest rate trajectories, especially as inflation data continues to moderate. Treasury yields experienced modest increases in a subdued session, with the two-year note rising one basis point to 3.76 per cent and the ten-year benchmark climbing similarly to 4.339 per cent. These movements align with broader expectations of a steady Fed policy, though they also signal underlying concerns about fiscal deficits and potential policy shifts under the current administration.

The US dollar index strengthened by 0.3 per cent, benefiting from the uptick in yields and its safe-haven appeal amid geopolitical jitters. Gold prices held relatively firm, dipping just 0.1 per cent to settle at US$3,333 per ounce, as buyers balanced inflation hedging against the dollar’s gains.

Brent crude oil, however, advanced 1.1 per cent to US$66 per barrel, a rebound attributed directly to the unresolved tensions from the Alaska summit. The lack of progress on Ukraine has reignited fears of supply disruptions from Russian exports, even as OPEC maintains production discipline.

In Asia, contrasts emerged vividly: Chinese stocks surged, propelling the Shanghai Composite Index up 0.8 per cent to its highest close since August 2015, fueled by retail investors pivoting from bonds to equities amid improving domestic sentiment and policy support from Beijing. Early trading today showed mixed openings across Asian indices, mirroring the uncertainty, while US equity futures pointed to a similarly ambivalent start.

In my view, these dynamics illustrate a bifurcated global economy, where US caution stems from policy anticipation and external risks. At the same time, China’s gains highlight internal momentum that could buffer against broader slowdowns. I see potential for Asian markets to outperform if geopolitical pressures ease, but sustained dollar strength might cap gains in emerging economies.

Amid this backdrop, the cryptocurrency sector stands out as a beacon of optimism, with institutional adoption accelerating at a pace that defies the broader market’s tentativeness. Japanese investment firm Metaplanet made headlines by acquiring an additional 775 Bitcoin for US$93 million, elevating its total holdings to 18,888 Bitcoin valued at approximately US$2.17 billion.

This move cements Metaplanet’s status as the seventh-largest corporate Bitcoin holder worldwide and exemplifies its disciplined accumulation strategy initiated in 2024. Despite Bitcoin’s recent price dip below US$115,500, Metaplanet’s stock rose 4 per cent, reflecting investor confidence in its low-leverage approach, which boasts a 12 per cent unrealised gain and debt over-collateralised by a factor of 18.67.

Other corporations follow suit, such as Strategy, adding 430 Bitcoin worth US$51.4 million, treating the asset as a hedge against inflation and currency debasement. These actions signal a maturation in corporate treasury management, where Bitcoin transitions from a speculative bet to a core balance-sheet component. I argue that this trend bolsters financial stability for these firms, as diversified holdings mitigate risks from traditional assets vulnerable to interest rate fluctuations.

The influx of capital into digital asset investment vehicles further underscores this shift, with last week’s inflows reaching US$3.75 billion, the fourth-highest on record and a sharp recovery from prior weeks’ lull. Assets under management hit an all-time high of US$244 billion on August 13, driven predominantly by products from iShares and similar issuers. Ethereum captured the spotlight, drawing a record US$2.87 billion in inflows, comprising 77 per cent of the total and pushing its year-to-date figure to US$11 billion.

This dominance relative to assets under management, 29 per cent for Ethereum versus 11.6 per cent for Bitcoin, highlights shifting investor preferences toward Ethereum’s utility in decentralised finance and smart contracts. Bitcoin inflows, at US$552 million, paled in comparison, though short-Bitcoin products saw minor gains of US$4 million.

Other altcoins benefited too: Solana attracted US$176.5 million, XRP US$125.9 million, Sui US$11.3 million, Chainlink US$1.2 million, and Cardano US$0.8 million, while multi-asset funds added US$0.4 million. Litecoin and Ton faced outflows of US$0.4 million and US$1 million, respectively. Geographically, the US dominated with 99 per cent of inflows at US$3.73 billion, followed by Canada (US$33.7 million), Hong Kong (US$20.9 million), Australia (US$12.1 million), and Switzerland (US$4.2 million); Sweden and Brazil saw outflows of US$49.9 million and US$10.6 million.

This surge aligns with broader institutional momentum, as evidenced by recent ETF flows where Ethereum products outpaced Bitcoin on certain days, with BlackRock and Fidelity leading the charge. Public companies now hold over US$160 billion in crypto, doubling since April, with Bitcoin at US$147 billion, Ethereum at US$10 billion, and Solana at US$1 billion.

Firms like BitMine Immersion Technologies aim to raise billions more for Ethereum acquisitions, targeting significant portions of its supply. In my opinion, this institutional embrace validates cryptocurrencies as legitimate assets, fostering price stability through reduced volatility over time. However, the subsequent week’s market slide reminds us of inherent risks, where sharp corrections can erase gains swiftly.

A pivotal development amplifying this trend is President Trump’s impending executive order, set for signing this Thursday, which aims to integrate alternative assets like Bitcoin ETFs and private equity into 401(k) retirement accounts. The order directs Labor Secretary Lori Chavez-DeRemer to reassess guidance under the Employee Retirement Income Security Act of 1974 (ERISA), collaborating with the Treasury and Securities and Exchange Commission to facilitate access.

This reverses Biden-era restrictions and reinstates evaluations from Trump’s first term, potentially unlocking trillions in retirement savings for crypto and other alternatives. The crypto industry, a major donor to Trump’s reelection, stands to gain immensely, especially following his earlier orders establishing a Bitcoin reserve and easing enforcement.

I view this as a transformative step toward democratising wealth-building, allowing everyday Americans to participate in high-growth assets previously reserved for the elite. I caution that the volatility of cryptocurrencies poses risks to retirement security; regulators must implement safeguards like allocation caps to prevent overexposure.

All in all, these events paint a picture of a world where traditional and digital finance converge amid geopolitical headwinds. Geopolitical stalemates, such as the Russia-Ukraine conflict, inject uncertainty, tempering equity gains and boosting safe havens. However, the crypto sector’s resilience, bolstered by corporate buys, record inflows, and policy support, offers a counter-narrative of innovation and opportunity.

In my assessment, investors should diversify thoughtfully, embracing crypto’s potential while hedging against global risks. This moment could herald a new era of inclusive finance, but only if balanced with prudence to weather inevitable storms. As markets evolve, the interplay between politics and economics will define the path forward, and I remain cautiously optimistic that strategic adaptations will yield long-term prosperity.

 

Source: https://e27.co/global-markets-freeze-as-trump-putin-summit-fails-whats-next-20250819/

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Powell’s speech could trigger a market meltdown or a crypto boom

Anndy Lian
Powell’s speech could trigger a market meltdown or a crypto boom

As the world turns its eyes toward a pivotal week in global economics, the stage is set for a series of data releases that could reshape market expectations and investor sentiment. On Thursday, August 21, 2025, flash Purchasing Managers’ Index surveys from S&P Global will roll out, providing the earliest glimpses into August’s business activity across major developed economies like the United States, the Eurozone, the United Kingdom, and Japan.

These indicators arrive at a critical juncture, following the recent implementation of higher US tariffs on August 7, which have already begun to ripple through supply chains and pricing dynamics. Investors will dissect these PMI figures for signs of resilience or strain, particularly in the manufacturing and services sectors.

Complementing this, inflation reports from various nations will add layers of complexity: Canada’s consumer price index lands on Tuesday, August 19, the UK’s on Wednesday, August 20, the Eurozone’s harmonised index on Friday, August 22, and Japan’s national CPI also on Friday.

The Federal Reserve’s minutes from its July meeting, due Wednesday, August 20, will offer clues about policymakers’ thinking on interest rates, while the annual Jackson Hole Economic Symposium, running from August 21 to 23, promises speeches from central bankers, including Fed Chair Jerome Powell’s address on Friday. This confluence of events comes amid a backdrop of trade tensions and shifting monetary policies, making it a high-stakes period for gauging the health of the global economy.

In the United States, the flash PMI data holds particular weight as the first major release since the tariffs took effect. President Trump’s administration pushed through these measures, elevating import duties on a broad swath of goods from key trading partners, marking the highest tariff levels since the Great Depression. Economists at the Yale Budget Lab estimate that these changes could shave 0.5 percentage points off US real GDP growth for both 2025 and 2026, while also fuelling inflationary pressures through higher input costs.

The tariffs aim to protect domestic industries and rectify trade imbalances, but early indicators suggest they disrupt supply chains and elevate prices for consumers and businesses alike. July’s consumer price index came in softer than anticipated, offering some relief, but any uptick in the PMI’s output prices sub-index could signal renewed inflation risks, potentially derailing hopes for aggressive rate cuts. Manufacturing inventories also draw scrutiny, as July data hinted at a reversal in building activity, possibly exacerbated by tariff-induced caution among firms.

The US has outperformed peers in recent quarters, bolstering global growth, but these trade developments test that momentum. If the PMI shows contraction in manufacturing, say, dipping below the 50 threshold, it might amplify calls for the Fed to ease policy more swiftly, especially if services hold steady.

Beyond the US, flash PMI readings from other developed economies will illuminate how these tariffs reverberate internationally. The Eurozone, already grappling with sluggish growth, could see its manufacturing sector further pressured by reduced US demand for exports, given America’s role as a major trading partner.

The United Kingdom, post-Brexit, faces similar vulnerabilities, with its PMI likely reflecting ongoing adjustments to global trade shifts. Japan’s data might reveal resilience in its export-oriented economy, though higher costs from tariffs on components could weigh on margins.

Even India, as a fast-growing emerging market, releases business sentiment updates this week, and analysts watch closely for any slowdown amid threats of reciprocal tariffs or diverted trade flows. These international snapshots matter because they feed into a broader narrative of interconnected growth. If PMIs across the board indicate softening, it strengthens the case for coordinated monetary easing among central banks, but divergent outcomes—such as US strength versus European weakness—could widen currency fluctuations and complicate investment strategies.

Inflation figures this week add another dimension to the puzzle, with the potential to sway central bank decisions. In the UK, Wednesday’s CPI report is forecasted to show a headline increase, building on recent PMI price signals that pointed to rising pressures. July’s data already introduced uncertainty around the Bank of England’s rate path, and a hotter-than-expected print could temper expectations for further cuts after its recent pivot.

The Eurozone’s harmonised CPI on Friday might underscore persistent services inflation, challenging the European Central Bank’s efforts to normalise policy. Japan’s core CPI, excluding fresh food, could edge higher due to wage growth and energy costs, testing the Bank of Japan’s gradual tightening stance.

Canada’s data on Tuesday precedes its own central bank’s moves, where softer inflation has opened the door to easing. Collectively, these releases test the narrative of disinflation that has dominated 2025 so far. If numbers surprise to the upside, markets might price in fewer rate reductions, pressuring equities and bonds, while downside surprises could fuel risk-on rallies.

The Federal Reserve’s July minutes, released midweek, will be parsed for any hints of discord among officials on the pace of cuts. July’s meeting maintained rates, but dovish undertones emerged in subsequent communications, with markets now betting on at least a 25-basis-point reduction in September. The minutes could reveal debates over labor market softening or inflation’s trajectory, especially in light of the tariffs’ potential to stoke prices.

Then comes Jackson Hole, the Fed’s marquee event in Wyoming, where Powell’s speech often sets the tone for autumn policy. Past symposiums have unveiled major shifts, like 2022’s hawkish pivot, and this year’s theme of reevaluating economic resilience amid trade wars adds intrigue.

Other central bankers, including those from the ECB and BOE, may chime in, offering cross-Atlantic perspectives. In my view, these gatherings underscore a delicate balancing act: policymakers must navigate tariff-induced uncertainties without overreacting, as premature tightening could tip economies into recession, while excessive easing risks rekindling inflation.

Shifting gears to the cryptocurrency markets, which often amplify broader economic signals, Bitcoin’s recent price action captures the volatility inherent in risk assets during uncertain times. The leading cryptocurrency rocketed to a fresh all-time high above US$124,100 earlier this month, only to retreat under bearish pressure, stabilising around US$118,000 over the weekend. On-chain analytics from Glassnode highlight critical support levels at US$117,500 and US$114,500, based on the cost basis distribution metric, which maps where investors acquired their holdings.

This heatmap reveals clusters of 72,900 BTC bought near US$117,500 and 56,201 BTC around US$114,500, suggesting these zones could act as cushions. Investors at these levels, many still in profit, might defend their positions by accumulating more, creating buying pressure that prevents deeper declines. However, a breach below US$114,500 opens the door to sharper corrections, as Glassnode data shows sparse support beneath, potentially targeting the US$110,000 to US$112,000 range where short-term holder cost bases cluster.

Recent posts on X from Glassnode emphasise this “air gap” of low liquidity between US$110,000 and US$116,000, filled gradually during dips but requiring stronger demand to solidify. In my perspective, Bitcoin’s resilience stems from its maturation as an asset class, with institutional adoption providing a floor even as macroeconomic headwinds like tariffs loom.

Ethereum, meanwhile, demonstrates bullish undercurrents through institutional flows and ecosystem growth. Over 200,000 ETH, valued at roughly US$888 million, exited centralised exchanges like Binance and Coinbase in a single day recently, the largest outflow since July 2025, signalling long-term holding or over-the-counter deals that reduce sell pressure.

This mirrors patterns preceding Ethereum’s 2024 rally from US$2,600 to US$4,000. Spot Ethereum ETFs have seen assets under management swell 57 per cent in the past 30 days to US$22.58 billion, with inflows like BlackRock’s US$338 million addition on August 15 underscoring demand despite occasional net outflows.

Stablecoin holdings on Ethereum hit an all-time high of US$130 billion, with USDC’s monthly transfer volume reaching US$8.6 billion, positioning the network as a hub for liquidity ready to rotate into altcoins as Bitcoin dominance slips 1.78 per cent weekly. These metrics suggest Ethereum benefits from capital shifts, especially if economic data this week bolsters rate-cut bets, lowering yields on traditional assets and driving flows into crypto.

Tying it all together, the interplay between these economic releases and crypto markets hinges on interest rate expectations. Tariffs introduce inflationary risks that could force central banks to pause easing, pressuring high-beta assets like Bitcoin and Ethereum.

If PMIs and inflation data reveal softening growth without runaway prices, the Fed and peers might accelerate cuts, injecting liquidity that historically lifts cryptos. In my opinion, the US economy’s outperformance provides a buffer, but global fragilities, amplified by trade barriers, warrant caution.

For crypto, the institutional accumulation in Ethereum and Bitcoin’s on-chain supports paint a constructive picture, potentially setting up for new highs if Jackson Hole delivers dovish signals. Investors should monitor price reactions closely, as these events could either cement a soft landing or ignite volatility.

Ultimately, while short-term turbulence persists, the long-term trajectory for both traditional and digital assets leans toward adaptation and growth, provided policymakers strike the right balance. This week’s data will be instrumental in charting that course, reminding us that in an interconnected world, no market operates in isolation.

 

Source: https://e27.co/powells-speech-could-trigger-a-market-meltdown-or-a-crypto-boom-20250818/

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The HR reality check: Why blockchain CVs are permanent but not always true

Anndy Lian
The HR reality check: Why blockchain CVs are permanent but not always true

Picture this: you’re reviewing a resume that lists an impressive Harvard MBA and five years leading engineering teams at a major tech company. You run the standard background check, and everything appears verified.

But what if that verification system itself is flawed? Blockchain-powered CV verification promises unchangeable records where credentials can’t be faked. This sounds revolutionary until you realise a critical flaw.

Blockchain doesn’t verify truth-only permanence. If false information enters the system initially, it becomes an unchangeable digital monument to deception. This creates what I call the Immutable Lie paradox.

We haven’t solved the trust problem; we’ve simply moved it upstream. Now, instead of questioning the candidate, we must question every institution feeding data into the blockchain.

When immutability protects lies: What happens next?

Consider how this plays out in reality. Traditional background checks already struggle with fraudulent credentials, but blockchain makes errors permanent. When a university registrar inputs data, whether accidentally or intentionally, the system records it as the absolute truth.

I recently examined a case where a candidate presented credentials from a university later found to be a diploma mill. The blockchain system had verified these credentials because the institution’s digital signature was valid at the time of entry.

The technology worked exactly as designed, yet it certified a complete fabrication. This isn’t progress. It’s digital entrapment where institutions become unwitting accomplices to fraud.

Reputation staking as an accountability mechanism

The solution requires real accountability. Decentralised reputation staking offers a practical fix. Universities and employers would lock cryptocurrency assets as collateral when submitting credentials.

If fraud is later proven through independent verification, the staked assets face automatic penalties. This creates tangible consequences for inaccurate reporting. Suddenly, institutions have financial skin in the game, transforming verification from a box-ticking exercise into a shared responsibility.

Honest reporting becomes economically advantageous while fraud carries real costs. This approach doesn’t eliminate human error but aligns incentives with truthfulness in a way no bureaucratic process ever could.

Beyond degrees: The shadow reputation economy

Now, let’s address the elephant in the room: traditional systems ignore how most people actually build careers. We focus obsessively on formal degrees and corporate titles while ignoring freelance projects, open-source contributions and self-taught skills that define modern professional growth.

Blockchain could create what I call a shadow reputation economy, where real work validates expertise. Imagine your GitHub contributions automatically generating verifiable proof of coding ability.

Picture clients issuing micro-endorsements as digital tokens after you complete freelance work. These small validations accumulate into a rich professional profile built through actual contributions rather than institutional approval.

This isn’t theoretical. Research shows blockchain can facilitate learning recognition beyond traditional academic boundaries. Why limit verification to what employers approve when our most valuable skills often emerge from informal work?

The pitfalls of biometric verification

The biometric verification trend alarms me most. Some platforms now require facial recognition via smartphone selfies to match your identity with blockchain credentials. This reduces professional identity to a biometric snapshot while ignoring career evolution.

Your value isn’t in your facial structure but in your growth your pivots and the skills you’ve developed during those so-called career gaps. I call this identity theater. It performs verification through superficial checks while neglecting substance. Instead of static documents or biometric scans blockchain should verify actual work. A developer’s proven contributions to major projects a designer’s portfolio hashed onto the chain because these demonstrate real capability far better than any degree certificate. The education sector has repeatedly failed at basic credential management so why trust it to define our entire professional essence through facial recognition?

Balancing privacy and verification

Privacy concerns present another tightrope walk. Blockchain’s transparency could expose sensitive career details like unemployment periods or frequent job changes creating new discrimination avenues.

An employer seeing your six-month gap might assume the worst when you were actually caring for family or recovering from burnout. Zero-knowledge proofs offer an elegant solution. They let you prove you meet specific criteria like five years in fintech without revealing employers or dates.

It’s verification without exposure, giving candidates control over their narrative while satisfying employer requirements. Systems designed with a distributed architecture already demonstrate how to maintain verification integrity without compromising privacy. Employers get confirmation of qualifications, and candidates avoid judgment based on incomplete career histories.

Why blockchain mirrors flaws rather than fixing them

What becomes clear after deep research is that blockchain CV systems mirror our existing societal flaws rather than fixing them. Engineering fields have seen structural failures due to hiring underqualified individuals. Blockchain won’t prevent this if the verification process remains flawed.

The technology itself is neutral; implementation determines its value. We need systems resilient against attacks that maintain functionality even when components fail, but we also need humility about technology’s limits. No blockchain can compensate for lazy hiring practices or institutional corruption.

Making blockchain work for people’s strategy: Shifts to consider

The path forward requires four essential shifts. First, we must abandon the fantasy that blockchain automatically equals trustworthiness. Second, we should implement decentralised reputation staking to hold institutions accountable. Third, we must recognise informal work as legitimate career building. Fourth, we need privacy-preserving verification that respects candidate narratives.

The most transformative possibility isn’t a perfect record of our past. It’s a living profile built through actual contributions. Imagine your professional reputation growing organically from verified work, open-source contributions, client testimonials, and project outcomes.

This isn’t just better verification, it’s recognition of how careers actually develop in the real world. Blockchain’s decentralised nature provides resilience against single points of failure, but only if we design it with human complexity in mind.

Design systems that value real contributions

Technology should serve people, not force us into narrower verification boxes. Blockchain CV systems must honour the messy reality of career growth rather than demanding conformity to outdated institutional models. The real credential isn’t on the chain. It’s in what you’ve built, who you’ve helped and how you’ve evolved. Any system losing sight of this fundamental truth fails its most important test.

Consider the developer who taught themselves to code while working in retail, building open-source tools that gained community recognition. Traditional systems would overlook this person, but a shadow reputation economy would highlight their proven skills.

Or the designer who pivoted careers after raising children, whose portfolio demonstrates current expertise despite employment gaps. Privacy-preserving verification would let them prove qualifications without explaining personal history. These aren’t hypotheticals. They’re real people whose value gets lost in current systems.

The institutions feeding blockchain systems must face real consequences for inaccurate data. When a university carelessly verifies degrees or an employer rubber-stamps promotions, they damage the entire ecosystem. Reputation staking creates necessary accountability, no more cost-free verification errors. This isn’t about punishment but shared responsibility for maintaining system integrity.

Crossroads for blockchain CVs: Choosing between control and genuine recognition

We’re at a crossroads. Blockchain CV technology could become another tool for institutional gatekeeping, or it could democratise professional recognition. The difference lies in whether we prioritise human complexity over bureaucratic convenience. Will we reduce careers to biometric snapshots and static credentials or will we build systems that recognise growth, informal learning and real-world contributions?

The answer matters because careers aren’t linear paths but evolving journeys. Your professional worth isn’t defined by a single institution’s stamp but by the cumulative impact of your work. Blockchain gives us the tools to verify this truth if we have the courage to move beyond traditional verification models.

What excites me most isn’t the technology itself but its potential to recognise professional value wherever it exists. A teacher developing educational apps in their spare time, a nurse creating patient resources, a marketer building community initiatives- these contributions matter. Blockchain could finally give them verifiable recognition beyond traditional employment structures.

This requires rejecting the notion that professional value must fit institutional moulds. The shadow reputation economy isn’t a secondary option. It’s the future of work recognition. As freelance and project-based work grows, our verification systems must evolve beyond employer-centric models. Blockchain provides the infrastructure but we must design it with human dignity at its core.

Privacy remains non-negotiable, even in the age of advanced verification. Candidates should never have to sacrifice narrative control simply to prove their credentials. Technologies like zero-knowledge proofs show that it’s possible to meet verification requirements without exposing unnecessary personal details. This way, employers can confirm qualifications with confidence, while candidates are protected from judgments based on incomplete or irrelevant career histories. Achieving this balance isn’t just desirable; it’s essential for truly ethical verification.

No technology can replace human judgment

The Immutable Lie paradox teaches us a crucial lesson: no technology can replace human judgment. Blockchain verifies consistency, not truth. Our responsibility is building systems where institutions face real consequences for inaccurate data while candidates gain control over their professional narratives.

We stand at the beginning of this transformation. The choices we make now will determine whether blockchain CV systems become tools of exclusion or liberation. Will they reinforce institutional gatekeeping or recognise value wherever it exists? The technology offers possibilities, but humans must provide the vision.

Let’s build verification that honours career complexity that sees the teacher developing apps after school, the nurse creating patient resources, the developer contributing to open source while working retail. These stories define real professional growth.

Blockchain gives us tools to verify them authentically. The revolution isn’t in technology but in recognising professional value beyond traditional boundaries. That’s the future worth building. One where your worth is measured by what you create, not just who approved your credentials.

Summary table: Key findings and challenges

AspectFindingChallengesImmutable Lie ParadoxBlockchain ensures immutability but not initial truthfulness.Detecting fraud, implementing reputation staking, and trust in institutions.Shadow Reputation EconomyEnable peers’ endorsements as NFTs for informal work.Ensuring endorser credibility, preventing fake endorsements.Biometric OverreachRisks of reducing identity to biometrics, privacy concerns.Data breaches, public blockchain exposure, and balancing security and privacy.

About author

Anndy Lian is a well-rounded business strategist in Asia. He has provided advisory services across a variety of industries for local, international, publicly listed companies and governments. He is an early blockchain adopter and experienced serial entrepreneur, book author, investor, board member and keynote speaker.

 

Source: https://hrsea.economictimes.indiatimes.com/news/hrtech/blockchain-cvs-the-immutable-lie-paradox-and-job-verification-challenges/123254143

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Crypto bleeds and Wall Street collapses as 0.9 PPI shock triggers Fed panic right now

Anndy Lian
Crypto bleeds and Wall Street collapses as 0.9 PPI shock triggers Fed panic right now

Markets reacted with caution yesterday as an unexpected surge in the US Producer Price Index for July rattled investors and reignited concerns over persistent inflation. The PPI climbed 0.9 per cent month-over-month, far exceeding the consensus forecast of 0.2 per cent, and pushed the annual rate to 3.3 per cent.

Analysts attribute this jump largely to businesses beginning to pass on higher import costs from recent tariffs imposed by the Trump administration. Core PPI, which strips out volatile food and energy components, also rose sharply by 0.9 per cent, lifting its yearly figure to 3.7 per cent, the highest since March.

This data suggests inflationary pressures are broadening beyond consumer goods, potentially complicating the Federal Reserve’s path to easing monetary policy. The Bureau of Labour Statistics highlighted significant increases in produce prices and services, underscoring how trade policies are filtering through the supply chain. This development highlights the double-edged sword of protectionist measures.

While tariffs aim to bolster domestic industries, they often translate into higher costs for businesses and ultimately consumers, fuelling inflation at a time when the economy is already navigating post-pandemic recovery challenges. I believe this could force the Fed into a more measured approach, balancing growth risks against the spectre of resurgent price pressures.

Treasury Secretary Scott Bessent added to the market’s uncertainty with his clarification on recent remarks about interest rates. On Wednesday, Bessent had suggested that short-term rates might need to drop by 150 to 175 basis points to reach a neutral level, sparking speculation about aggressive Fed action.

However, he emphasised yesterday that he was not advocating for a specific 50 basis point cut in September, instead pointing to economic models that indicate current rates are too restrictive. Bessent reiterated that his comments were observational, not prescriptive, telling interviewers that the Fed should consider a gradual reduction, perhaps starting with 25 basis points before accelerating if needed.

This backpedaling came amid criticism that the administration was pressuring the independent central bank, a recurring theme under President Trump. Market-implied odds for a September rate cut, as tracked by CME Group’s FedWatch tool, adjusted back to around 90 per cent following Bessent’s statements, aligning with levels seen before Tuesday’s milder CPI release.

Prior to the PPI data, odds had briefly surged toward certainty for a cut, but the hotter wholesale inflation figures tempered enthusiasm, with swaps now pricing in about a 96 per cent chance of at least a quarter-point reduction. From my perspective, Bessent’s interventions, while data-driven, risk undermining Fed credibility.

In an era of heightened political influence on economic policy, such public commentary could erode investor confidence, especially if it leads to perceptions of policy interference. I think the Fed will proceed cautiously, prioritising data over rhetoric, but this episode underscores the tense interplay between fiscal and monetary authorities in 2025.

Equity markets felt the brunt of this mixed sentiment, with Wall Street’s recent rally stalling as major indices closed essentially flat. The S&P 500, NASDAQ, and Dow Jones all hovered near unchanged, reflecting a tug-of-war between optimism over potential rate relief and worries about inflation’s resurgence. Investors appeared to shrug off the PPI surprise initially, but as the day progressed, profit-taking emerged, particularly in tech-heavy sectors sensitive to higher yields.

Bond markets, however, reacted more decisively, with short-term US Treasury yields climbing sharply. The two-year yield rose six basis points to 3.73 per cent, while the benchmark 10-year yield settled near 4.29 per cent. This inversion in the yield curve’s movement signals renewed bets on a less dovish Fed, as traders anticipate fewer or smaller cuts if inflation proves stickier than expected.

In Asia, the Hang Seng and CSI 300 indices surrendered early gains to finish down 0.37 per cent and 0.08 per cent respectively, as regional investors locked in profits from the prior rally. Today’s early trading sessions opened mixed, with some indices edging higher on hopes of global stimulus, while US equity futures pointed to a similarly uneven start.

My take here is that this sideways trading masks underlying fragility. With tariffs amplifying cost pressures, equities could face headwinds if corporate earnings begin to reflect squeezed margins. I remain cautiously optimistic for tech and growth stocks, but only if the Fed delivers on easing without stoking further inflation.

The US dollar capitalised on the higher yields, rebounding 0.4 per cent on the Dollar Index to recoup recent losses. This strength pressured commodities, with gold dipping 0.6 per cent to close at US$3,336 per ounce, as a firmer dollar and elevated rates diminished its appeal as a non-yielding asset. Oil prices, conversely, bucked the trend, advancing 1.8 per cent to around US$67 per barrel.

This uptick stemmed from dim prospects for a breakthrough at tomorrow’s US-Russia summit in Alaska, where Presidents Trump and Putin are set to discuss energy cooperation, sanctions, and geopolitical tensions. Officials from both sides have downplayed expectations, with Trump warning of potential consequences for Russian oil exports if agreements falter. Harsher sanctions could disrupt supplies, pushing Brent crude above US$80 if tensions escalate.

The summit, hosted at Joint Base Elmendorf-Richardson in Anchorage, marks a high-stakes diplomatic effort amid ongoing conflicts, but low hopes have traders positioning for volatility. In my opinion, oil’s resilience here is telling. Geopolitical risks often trump economic data in driving energy prices, and with Russia’s role as a major exporter, any summit fallout could exacerbate global supply strains. This as a reminder that energy markets remain vulnerable to non-economic factors, potentially offsetting any demand slowdown from higher rates.

Amid this macro turbulence, the cryptocurrency market presented a contrasting narrative, with Bitcoin demonstrating remarkable strength. The flagship digital asset surged past US$124,000 overnight before retreating to approximately US$120,991 early Thursday, still marking a 0.6 per cent gain over the past 24 hours. This move initially rode bets on Fed rate cuts fueling risk assets, but momentum waned post-PPI, as inflation doubts clouded the easing outlook.

A key on-chain indicator, Bitcoin’s realised price, has overtaken its 200-week moving average for the first time this cycle, a crossover not seen since 2020. The realised price, calculated as the realised capitalisation divided by total supply, represents the average cost basis of all Bitcoin holders, essentially the price at which coins last moved on-chain. Currently, this metric stands above the 200-week MA, which averages Bitcoin’s closing prices over roughly four years to gauge long-term cycle trends.

Historical data shows this flip coincided with the onset of the 2021 bull run, maintaining the orientation until 2022’s downturn. In the 2017 cycle, while no full crossover occurred, a retest propelled prices higher. Analysts like those at Mitrade and AInvest note that when realised price stays above the 200-WMA, bull markets tend to extend, signalling sustained holder profitability and reduced selling pressure.

This crossover, shared by analyst Van Straten via charts spanning the past decade, illustrates how Bitcoin’s uptrend has naturally elevated the realised price as investors transact at higher levels, repricing their cost bases upward. The graph reveals a clear pattern: the metric’s surge above the MA often heralds prolonged uptrends, as it indicates the average investor is in profit, discouraging mass capitulation. In 2020, the timing aligned perfectly with the bull market’s ignition, driven by institutional adoption and stimulus. Even in 2017, where realised price never dipped below, a touchpoint sparked explosive growth.

Recent X posts echo this bullish sentiment, highlighting the three-year milestone and historical precedents for extended rallies. From my standpoint, this technical milestone is profoundly significant. In a market still tethered to macro events, Bitcoin’s on-chain resilience suggests it’s maturing as an asset class, less swayed by short-term inflation blips and more by network fundamentals. I predict this could propel BTC toward US$200,000 by year-end, especially if rate cuts materialise, drawing in sidelined capital.

Altcoins, however, bore the inflation hit more acutely, underscoring crypto’s internal divergences. Ether fell 2.3 per cent to US$4,577, Solana dropped 2.9 per cent, XRP slid 5.1 per cent, and Dogecoin tumbled 7.7 per cent. These riskier tokens, often amplified versions of Bitcoin’s moves, suffered as sentiment shifted toward caution, with traders scrutinising every economic release ahead of the Fed’s September decision.

If rates remain elevated longer, the upside case for ETH and SOL dims, as higher borrowing costs curb speculative flows into DeFi and memecoins. Yet, Bitcoin’s dominance in such environments typically rises, as seen in past cycles. While altcoins face near-term murkiness, the broader crypto ecosystem benefits from Bitcoin’s leadership. Innovations like layer-2 scaling on Ethereum could mitigate downside, but patience is key until macro clarity emerges.

Overall, yesterday’s developments paint a picture of a global economy at a crossroads, where inflation’s stubbornness clashes with easing hopes, and geopolitical wildcards like the Alaska summit loom large. In crypto, Bitcoin’s realised price crossover stands as a beacon of bullish potential, backed by historical patterns and on-chain data. Drawing from financial analyses, I see this as the start of an uptrend that could define the cycle.

Investors should monitor Fed signals closely, but in my estimation, the confluence of technical strength and potential policy shifts positions digital assets for outperformance, even as traditional markets grapple with uncertainty. This dynamic reinforces my belief in crypto’s role as a hedge against fiat volatility, urging diversified portfolios in these turbulent times.

 

 

Source: https://e27.co/crypto-bleeds-and-wall-street-collapses-as-0-9-ppi-shock-triggers-fed-panic-right-now-20250815/

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Bitcoin smashes US$124,000, gold hits US$3,356: The safe-haven secret investors are piling into

Anndy Lian
Bitcoin smashes US$124,000, gold hits US$3,356: The safe-haven secret investors are piling into

The recent improvement in global risk sentiment, driven by milder-than-expected concerns over tariff implications, strong corporate earnings, and growing expectations of a Federal Reserve rate cut, has created a fertile ground for optimism across equity and cryptocurrency markets.

Concurrently, geopolitical warnings from US President Donald Trump regarding a potential Russian ceasefire and the evolving dynamics of US treasuries, the US Dollar Index, gold, and digital assets like Bitcoin, Ethereum, and XRP underscore the complexity of the current economic environment.

The improvement in global risk sentiment stems from several interconnected factors. First, the market’s reaction to tariff policies under President Trump’s administration has been less severe than anticipated. Earlier concerns about aggressive trade barriers, particularly with major partners like the European Union, Japan, and China, had sparked fears of disrupted supply chains and inflationary pressures.

However, recent trade agreements, such as the US-EU deal setting a 15 per cent tariff rate on most EU goods (excluding select sectors) and a similar US-Japan agreement, have alleviated some of these worries. These deals suggest a more measured approach to trade policy, reducing the immediate risk of widespread economic disruption.

For instance, J.P. Morgan Global Research notes that the US-Japan trade deal, with tariffs set at 15 per cent rather than the feared 25 per cent , could boost Japanese corporate earnings by approximately 3 percentage points, supporting both equity markets and the yen. This moderation in tariff expectations has allowed investors to focus on other positive signals, such as robust corporate earnings.

Corporate earnings have played a pivotal role in bolstering market confidence. Despite initial concerns about tariff-related cost pressures, US companies, particularly in technology and consumer discretionary sectors, have reported strong quarterly results. The S&P 500, for example, is projected to see modest earnings growth of 2.8 per cent year-over-year for Q2 2025, though this represents the smallest increase in two years.

Notably, 83 per cent of S&P 500 companies have exceeded earnings expectations, with an average beat of 6.9 per cent , providing a tailwind for equity indices. This resilience has been particularly evident in large-cap technology firms, which have benefited from lower borrowing costs and increased investor appetite for growth stocks. The Nasdaq’s marginal gain of 0.1 per cent and the S&P 500’s 0.3 per cent rise to record highs reflect this optimism, even as the Dow Jones Industrial Average outperformed with a one per cent increase, driven by strength in cyclical sectors.

The prospect of a Federal Reserve rate cut as early as the September 2025 FOMC meeting has further fuelled market enthusiasm. Investors are increasingly pricing in a 75.5 per cent probability of a rate cut, spurred by weaker-than-expected labor market data, including a July 2025 nonfarm payrolls report showing only 73,000 jobs added against expectations of 100,000. The unemployment rate’s uptick to 4.2 per cent and downward revisions to prior job growth figures have heightened concerns about an economic slowdown, prompting calls for monetary easing.

Treasury Secretary Scott Bessent’s mention of a potential 50-basis-point cut in a post-market interview has added to these expectations, though market pricing currently leans toward a more modest 25-basis-point reduction. Goldman Sachs Research has revised its forecast to include rate cuts starting in September, projecting a terminal federal funds rate of 3-3.25 per cent by 2026, citing smaller-than-expected tariff impacts and moderating inflation pressures. This dovish outlook has driven a rally in US treasuries, with the 10-year yield stabilising near 4.235 per cent and the 2-year yield dropping to 3.68 per cent , reflecting investor confidence in a softer monetary policy stance.

Geopolitical developments, however, introduce a layer of uncertainty. President Trump’s warning of “very severe consequences” if Russian President Vladimir Putin does not agree to a ceasefire adds a volatile dimension to the global risk calculus. While the specifics of these consequences remain unclear, the rhetoric suggests potential escalations that could impact energy markets, global trade, and investor sentiment.

A failure to secure a ceasefire could lead to heightened geopolitical risk premiums, potentially offsetting some of the positive momentum from domestic economic indicators. For now, markets appear to be discounting immediate escalation, focusing instead on the improving economic narrative, but this remains a critical variable to monitor.

The performance of US equity indices reflects the market’s ability to compartmentalise these risks. The S&P 500, Nasdaq, and Dow Jones reaching all-time highs underscore a robust risk-on environment, driven by expectations of lower borrowing costs and sustained corporate profitability.

Asian equity indices, mainly opening higher in early trading, mirror this sentiment, though US equity futures suggest a mixed open, indicating some caution among investors. The US Dollar Index’s decline of 0.3 per cent reflects the anticipated Fed easing, as lower interest rates reduce the appeal of dollar-denominated assets. Conversely, gold’s modest 0.2 per cent gain to US$3,356 per ounce highlights its role as a safe-haven asset amid lingering geopolitical and economic uncertainties.

The cryptocurrency market, particularly Bitcoin, Ethereum, and XRP, has emerged as a significant beneficiary of the current risk-on sentiment. Bitcoin’s surge past US$124,000 on August 13, 2025, marks a new record high, aligning closely with the rally in US equities. This milestone, surpassing the previous peak of US$123,205.12 from July 14, reflects a broader embrace of risk assets, fueled by a favorable legislative climate under President Trump. Public companies, led by Michael Saylor’s MicroStrategy, have increasingly adopted Bitcoin as a corporate treasury asset, driving demand and inspiring smaller firms to follow suit.

This trend has spilled over to other cryptocurrencies, with Ethereum breaking through an 18-month resistance zone and eyeing US$7,000. Ethereum’s strength is underpinned by its central role in decentralised finance (DeFi), bolstered by scaling upgrades from Ethereum 2.0 and rising activity in staking, NFT markets, and Layer 2 solutions. On-chain data showing large wallet movements further supports a bullish outlook, though challenges like high gas fees and slower transaction speeds persist, creating opportunities for competitors like Cold Wallet to capture market share with user-friendly alternatives.

XRP’s potential breakout above US$3.70, with a possible climb to US$5, is supported by technical patterns like the cup-and-handle formation and fundamental drivers such as increased adoption by financial institutions and clarity on its legal standing. The cryptocurrency’s stability and growing acceptance among major players enhance its appeal as a dependable asset in the top-cap space.

These developments in the crypto market highlight a broader trend of financial innovation and adoption, driven by both institutional and retail investor enthusiasm. However, the volatility inherent in digital assets necessitates caution, as rapid price movements can amplify risks in an already uncertain macroeconomic environment.

From a personal perspective, the current market dynamics present both opportunities and challenges for investors. The improved risk sentiment and expectations of Fed easing create a favorable backdrop for equities, particularly in sectors like technology and real estate, which stand to benefit from lower borrowing costs. However, the potential for tariff-related inflation and geopolitical disruptions warrants a diversified approach. By allocating to quality stocks with strong fundamentals, as suggested by iShares, and incorporating safe-haven assets like gold or high-quality bonds, one can provide a buffer against volatility.

In the cryptocurrency space, Bitcoin and Ethereum offer compelling growth potential. Still, their high valuations and technical challenges suggest a balanced exposure, possibly complemented by emerging platforms like Cold Wallet or XRP for diversification. The interplay of monetary policy, trade dynamics, and geopolitical risks requires investors to remain agile, leveraging data-driven insights to navigate this complex landscape.

In conclusion, the global financial markets are at a pivotal juncture, with improved risk sentiment driven by moderated tariff concerns, strong corporate earnings, and expectations of Fed rate cuts. While US equity indices and cryptocurrencies like Bitcoin, Ethereum, and XRP reflect this optimism, geopolitical tensions and economic uncertainties underscore the need for cautious optimism.

By balancing exposure to growth assets with defensive strategies, investors can position themselves to capitalise on opportunities while mitigating risks in this evolving environment.

 

 

Source: https://e27.co/bitcoin-smashes-us124000-gold-hits-us3356-the-safe-haven-secret-investors-are-piling-into-20250814/

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Trump’s trade war looms, but markets are betting on a Fed rate cut

Anndy Lian
Trump’s trade war looms, but markets are betting on a Fed rate cut

Recent developments, including softer-than-expected US inflation data, expectations of Federal Reserve rate cuts, and ongoing trade policy uncertainties, have driven a notable improvement in global risk sentiment. Meanwhile, political pressures on Federal Reserve Chair Jerome Powell, a robust Wall Street rally, and significant movements in cryptocurrencies like Bitcoin and Ethereum highlight the multifaceted nature of today’s markets.

The US economy remains at the forefront of global financial discussions, particularly following July’s softer-than-expected inflation data. This development has fuelled expectations of a Federal Reserve rate cut in September, as inflationary pressures from President Donald Trump’s tariff policies have not yet fully materialised. Inflation, a key metric for central banks worldwide, has been a persistent concern since the post-COVID-19 price spikes.

The Consumer Price Index (CPI), a primary measure of inflation, has shown signs of moderation, with recent readings suggesting that price pressures are easing. This has led investors to anticipate a more accommodative monetary policy from the Federal Reserve, which could lower borrowing costs and stimulate economic activity.

Goldman Sachs economists, for instance, have revised their forecasts, predicting a potential rate cut in September, three months earlier than previously expected, with a terminal fed funds rate of 3-3.25 per cent by 2026. This shift reflects a belief that tariffs may have a one-time effect on price levels rather than sustained inflationary pressure, coupled with signs of a softening labour market.

However, the Federal Reserve’s cautious approach underscores the uncertainty surrounding trade policies. President Trump’s tariffs, which include a 25 per cent duty on goods from Mexico and Canada and doubled tariffs on Chinese imports, have raised concerns about potential price increases. Fed Chair Jerome Powell has emphasised the need to “wait and learn more” about the tariffs’ impact on inflation before adjusting rates, a stance that has drawn significant criticism from the Trump administration.

Powell has acknowledged that tariffs have contributed to recent price increases, with retailers likely to pass on higher costs to consumers as pre-tariff inventories deplete. Despite these concerns, the Treasury Department, led by Secretary Scott Bessent, has downplayed the consumer impact, citing only a modest 0.1 per cent uptick in prices and highlighting record tariff revenues of US$23 billion in May. This revenue surge underscores the fiscal implications of tariffs, which have generated nearly US$100 billion this year, though businesses have borne much of the cost so far.

The political pressure on Powell has intensified, with Trump publicly considering a “major lawsuit” against him, accusing the Fed Chair of slow-walking rate cuts due to misplaced fears of tariff-driven inflation. Additionally, a referral by Rep. Anna Paulina Luna to the Department of Justice, alleging perjury by Powell over the Fed’s headquarters renovation, has added to the political overhang. These developments have raised concerns about the Federal Reserve’s independence, a cornerstone of effective monetary policy.

Investors worry that political interference could undermine the Fed’s ability to make data-driven decisions, potentially destabilising markets. The US Dollar Index, which measures the dollar against a basket of major currencies, weakened by 0.4 per cent following the inflation data and reports of Trump’s plan to nominate EJ Antoni to lead the Bureau of Labor Statistics. This nomination could signal a shift toward more administration-aligned economic reporting, further complicating the Fed’s policy landscape.

Despite these uncertainties, Wall Street has experienced a robust rally, with the S&P 500 gaining one per cent, the NASDAQ climbing 1.4 per cent, and the Dow Jones rising 1.1 per cent. The communications and information technology sectors have been key drivers, reflecting investor optimism about economic resilience and technological innovation.

The S&P 500’s recent highs mark a recovery from a 10 per cent correction earlier this year, triggered by tariff-related fears. US treasuries, meanwhile, have shown mixed performance, with front-end yields declining and long-end yields rising, resulting in a steepening yield curve. This dynamic suggests that investors anticipate stronger economic growth in the longer term, possibly driven by fiscal stimulus or reduced regulatory burdens under the Trump administration. The decline in the 10-year Treasury yield to 4.40 per cent reflects growing demand for safer assets amid trade tensions and geopolitical uncertainties.

In the commodities market, gold has remained largely unchanged at US$3,347 per ounce, maintaining its status as a safe-haven asset despite improved risk sentiment. Brent crude, on the other hand, fell 0.77 per cent to US$66 per barrel, reflecting a lack of significant catalysts and subdued demand expectations. The interplay between these commodities and broader market trends highlights the delicate balance between inflationary pressures and growth concerns. Gold’s stability suggests that investors are hedging against potential volatility, while the decline in oil prices points to weaker global demand, particularly in light of trade uncertainties.

In Asia, the Reserve Bank of Australia (RBA) has taken a dovish stance, lowering its policy rate by 25 basis points to 3.60%, marking its third rate cut this year. This move reflects easing inflation concerns and a shift in focus toward global trade and demand risks. Asian equity markets have responded positively, buoyed by Trump’s extension of the US-China trade truce and confirmation that gold imports will remain tariff-free. These developments have alleviated some concerns about trade disruptions, contributing to gains in Asian indices and a positive start to today’s trading session. US equity futures, however, suggest a mixed opening, indicating that investors remain cautious about the broader economic outlook.

The cryptocurrency market has also been a focal point, with Bitcoin retesting US$122,000 before pulling back to US$119,053. This rally reflects renewed investor enthusiasm, driven by broader market optimism and significant institutional activity. Binance’s dominance in global trading volume is a critical metric, as concentrated activity on a single exchange could signal limited market breadth, potentially undermining the sustainability of the rally.

Historical comparisons suggest that broader market participation is essential for sustained price gains at all-time highs. Meanwhile, Ethereum has surged over seven per cent to above US$4,500, fuelled by significant institutional adoption and capital flows. The Ethereum Foundation’s sale of 2,795 ETH, valued at US$12.7 million, has drawn attention, particularly as it coincides with ether’s strong price momentum. The wallet, linked to the “EF 1” address, now holds 99.9 ETH and 11.6 million DAI, reflecting a strategic move to lock in gains during the price surge.

Corporate adoption of Ethereum has further bolstered its performance, with companies like SharpLink Gaming and BitMine holding nearly US$9 billion in ETH. BitMine, under the leadership of chairman Tom Lee, has transitioned from Bitcoin mining to an Ethereum treasury, with holdings exceeding US$5 billion. Lee’s ambitious plan to raise US$20 billion to acquire more Ethereum underscores the growing institutional confidence in the cryptocurrency.

Spot Ethereum exchange-traded funds (ETFs) have also seen record inflows, with over US$1 billion in daily net inflows on Monday, marking a significant milestone since their debut. These developments highlight Ethereum’s outperformance of Bitcoin in year-to-date gains, driven by its utility in decentralised finance and institutional backing.

The broader economic and market environment remains fraught with uncertainty. Trump’s tariff policies, while generating significant revenue, pose risks to consumer prices and global trade dynamics. The Federal Reserve’s cautious stance reflects a delicate balancing act between fostering economic growth and containing inflation.

Political pressures on the Fed, combined with leadership transitions looming in 2026, could further complicate monetary policy. Meanwhile, the resilience of US equity markets and the surge in cryptocurrencies suggest that investors are navigating these uncertainties with a mix of optimism and caution.

In my view, the current improvement in global risk sentiment is a fragile one, heavily contingent on the trajectory of US monetary policy and trade negotiations. The Federal Reserve’s data-dependent approach is prudent, given the potential for tariffs to reignite inflationary pressures. Political interference in central bank operations risks undermining market confidence and could lead to volatility if not carefully managed.

The strength in equity markets, particularly in technology and communications, reflects the transformative potential of innovation, but valuations may be stretched if economic growth falters. Cryptocurrencies, while benefiting from institutional adoption, face risks of overheating, particularly if trading activity remains concentrated on platforms like Binance. The RBA’s rate cut and Asia’s positive response to trade truce extensions highlight the global ripple effects of US policy decisions. Investors should remain vigilant, balancing opportunities in risk assets with hedges like gold to navigate the uncertainties ahead.

 

 

Source: https://e27.co/trumps-trade-war-looms-but-markets-are-betting-on-a-fed-rate-cut-20250813/

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Anndy Lian warns stablecoins may dethrone the dollar

Anndy Lian
Anndy Lian warns stablecoins may dethrone the dollar

Anndy Lian, a notable voice in the real-world economics discourse, is raising concerns about the burgeoning impact of stablecoins on the US dollar. He claims that the financial landscape may be witnessing a silent revolution as these digital assets quietly challenge the dominance of traditional fiat currencies, particularly the dollar.

Lian suggests that the influence of stablecoins, which are rapidly gaining traction for providing a digital equivalent with minimized volatility, is underestimated by conventional financial markets. He emphasizes that the lack of attention from Wall Street could result in a seismic shift in currency dynamics, altering global economic balances in unforeseen ways.

 

 

Source: https://tradersunion.com/news/market-voices/show/433356-stablecoins-threat-dollar/

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Stablecoins Are Quietly Exploding the Dollar – The Inflation Secret Wall Street Doesn’t Want You To Know

Anndy Lian
Stablecoins Are Quietly Exploding the Dollar – The Inflation Secret Wall Street Doesn’t Want You To Know

Let me tell you something that keeps financial insiders awake at night. Right now, over $270 billion in stablecoins like USDT and USDC are circulating globally, yet nobody is talking about why this isn’t causing grocery prices to skyrocket. I’ve spent years dissecting digital finance systems, and here’s the shocking truth nobody will admit: stablecoins aren’t inflating your coffee bill, but they’re quietly detonating something far more dangerous.

How Stablecoins Actually Work Behind the Scenes

Forget everything you think you know about stablecoins. These aren’t digital dollars floating freely in the economy. When Tether or Circle mint new tokens, they lock real dollars in vaults and then buy US Treasury bonds. This isn’t theoretical. Tether now holds $127 billion in Treasuries, making it the 18th largest US debt holder globally, bigger than South Korea’s entire holdings. Circle just got regulatory green light for its IPO, proving this model has mainstream approval.

The magic trick happens next. Those Treasury bonds earn interest while the stablecoins circulate exclusively within crypto markets. Think of it as creating a parallel financial universe where digital dollars move at light speed but never touch Main Street. The Federal Reserve’s $3.5 trillion in bank reserves earns 4.5% interest sitting frozen to prevent inflation, yet stablecoins operate in a shadow system completely bypassing traditional controls.

Why Your Grocery Bill Isn’t Rising Thanks to Stablecoins

Here’s where everyone gets it wrong. Stablecoins aren’t causing real-world inflation because they’re not being used like real money. Walk into any coffee shop, try paying with USDC. Good luck.

I analyzed transaction data across major platforms and discovered something staggering. While stablecoins processed $27.6 trillion in volume last year, that’s 7.68 times more than Visa and Mastercard combined. The reality is that 88.1% of stablecoin transactions are driven by cryptocurrency trading, involve institutional players moving liquidity between exchanges, not buying lattes. Retail users provide most decentralized exchange liquidity, but institutions control the flow. This isn’t economic activity, it’s high-speed financial plumbing.

The critical misunderstanding is equating transaction volume with economic impact. When the same digital dollar moves 50 times between crypto exchanges, it creates massive volume numbers but zero new demand for physical goods. It’s like counting how many times water sloshes in a bathtub versus how much actually leaves the tub. Right now, all that water stays neatly contained.

The Hidden Inflation Bomb Nobody Is Tracking

While your local economy remains untouched, stablecoins are causing explosive inflation somewhere else, in Bitcoin. This isn’t speculation, it’s cold, hard math. Watch what happens when Tether mints $1 billion in new USDT. Market makers immediately deploy that liquidity across exchanges, creating instant buying pressure on Bitcoin.

I’ve tracked this pattern for two years, and the correlation is undeniable. Every major stablecoin issuance surge precedes Bitcoin price jumps by hours, not weeks. It’s a self-reinforcing loop: new stablecoins fuel Bitcoin demand, which attracts more stablecoin issuance. This isn’t traditional inflation, but it’s inflation nonetheless, hitting one asset class with surgical precision.

The scary part, Wall Street calls this the liquidity bridge effect. When institutional players move billions between exchanges, they use stablecoins as the vehicle, creating artificial demand spikes. I’ve seen Bitcoin pump 10-15% in minutes purely from stablecoin flows with zero real-world news driving it. This is inflation in its purest form: too much digital money chasing too few crypto assets.

The Federal Reserve’s Silent Nightmare

Let’s compare how traditional and digital dollars behave. When the Fed creates money, it enters slowly through bank lending, creating predictable inflation channels. But stablecoins operate like digital nitroglycerin. Tether can mint $2 billion overnight and flood crypto markets in minutes, bypassing all traditional monetary controls.

The Fed’s $3.5 trillion in bank reserves earns interest while sitting frozen, a deliberate move to prevent hyperinflation. Stablecoins, however, circulate at digital speed within their closed ecosystem. It’s like comparing a dripping faucet to a firehose; both involve water, but one can flood your house instantly.

Here’s what keeps central bankers up at night. If stablecoins ever breach their crypto walls, they could supercharge inflation beyond control. Traditional tools like interest rate hikes work on slow-moving physical money. They’re useless against digital dollars zipping across borders in seconds. The Fed built its entire playbook for a world that’s vanishing.

The Ticking Clock Before Real Inflation Hits

Right now, stablecoins are safely contained in the crypto sandbox. But three explosive developments could change everything overnight. First, regulators are pushing for banks to tokenize their $3.5 trillion in Fed reserves. Imagine if Chase or Bank of America issued digital dollars compatible with stablecoin networks. Suddenly, that frozen liquidity becomes hyperactive digital cash.

Second, the GENIUS Act, scheduled for July 2025, will grant federal recognition to dollar stablecoins. This isn’t dry legislation, it’s the green light for mass adoption. Industry giants like Amazon and Walmart are reportedly moving toward stablecoin-style offerings as payment networks brace for disruption.

Third remittance companies are quietly building stablecoin corridors. Latin America is already using it for cross-border payment and security. The $1 trillion stablecoin milestone isn’t a prediction, it’s an inevitability coming faster than anyone expects.

Why This Changes Everything

The real danger isn’t stablecoins themselves but what they represent: a parallel monetary system operating outside central bank control. Traditional inflation measures like CPI completely ignore crypto market dynamics. When stablecoins eventually breach into real economies, we’ll face inflation that the Fed can’t measure, let alone control.

I’ve modeled three scenarios based on current adoption curves. In the mild case, stablecoins remain crypto plumbing, and Bitcoin keeps absorbing the inflationary pressure. In the medium scenario, retail adoption hits 15% of global remittances, triggering localized inflation in emerging markets. But the nightmare scenario, 40% of international trade using stablecoins, would create runaway inflation, the likes of which we haven’t seen since Weimar Germany.

Here’s the chilling part. Central banks monitor the M2 money supply, but stablecoins aren’t counted in those metrics. That $270 billion is invisible to traditional economics. It’s like trying to navigate a storm while blindfolded. The tools we’ve relied on for decades are becoming obsolete before our eyes.

The Path to Financial Armageddon

Picture this, 2027. A major bank tokens its entire $500 billion reserve account. Those digital dollars instantly connect to stablecoin networks. Within hours, that frozen capital floods into crypto markets and then spills into real economies as people convert to local currency. Grocery stores raise prices overnight. Central banks scramble to hike rates, but it’s too late; the digital floodgates are open.

This isn’t science fiction. The infrastructure exists today. Circle’s USDC already integrates with Visa’s payment network. Tether’s Treasury holdings give it unprecedented market power. The only thing preventing chaos is artificial containment within crypto exchanges. Break that dam, and digital dollars will move faster than policymakers can react.

What You Must Do Right Now

Don’t wait for the crisis to hit. First, diversify beyond traditional assets. Bitcoin isn’t just crypto; it’s the canary in the coal mine for stablecoin inflation. Second, demand transparency from stablecoin issuers. Tether’s $127 billion Treasury position should scare anyone, as it means a private company now wields sovereign-level financial power.

Most importantly, pressure regulators to count stablecoins in money supply metrics. The Fed’s models are dangerously blind to this growing threat. If we don’t update our economic toolkit before stablecoins hit mainstream adoption, we’ll be fighting the last war while the real battle rages unseen.

The Bottom Line

Stablecoins aren’t causing inflation in your local economy today, but they’re building a pressure cooker underneath the global financial system. That $270 billion is quietly inflating Bitcoin while waiting for the moment it breaches into real markets. When that happens, and it will happen, traditional inflation controls will be as useful as a screen door on a submarine.

The clock is ticking. Banks are already tokenizing reserves, regulators are blessing stablecoins, and adoption is accelerating exponentially. This isn’t about crypto enthusiasts anymore. It’s about the very foundation of modern monetary policy. The question isn’t whether stablecoins will cause inflation but how much damage we’ll suffer before admitting the truth.

Wake up. The dollar you know is being replaced right under your nose. And when the flood comes, don’t say nobody warned you.

 

Source: https://www.benzinga.com/markets/cryptocurrency/25/08/47067924/stablecoins-are-quietly-exploding-the-dollar-the-inflation-secret-wall-street-doesnt-want-

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Why tonight’s inflation report could shake global markets to their core

Anndy Lian
Why tonight’s inflation report could shake global markets to their core

July Consumer Price Index (CPI) data is a critical indicator of inflationary trends that could shape monetary policy and asset prices worldwide. The muted global risk sentiment reflects a cautious stance among investors, driven by uncertainty surrounding the inflation report and its implications for Federal Reserve policy.

Meanwhile, President Donald Trump’s executive order extending the China tariff deadline by 90 days into early November has provided a temporary reprieve, lifting sentiment in Asian markets. However, Wall Street’s cautious retreat from near-record highs, coupled with developments in cryptocurrencies like Ethereum and Bitcoin, underscores the intricate interplay of macroeconomic data, trade policies, and speculative assets in shaping market dynamics.

The US July CPI report, due tonight, is a focal point for markets, as it will provide insight into whether inflationary pressures are intensifying or moderating. Economists project a year-over-year headline inflation increase of 2.8 per cent, up 10 basis points from June’s 2.7 per cent, with core CPI, which excludes volatile food and energy prices, expected to rise 0.3 per cent month-over-month and 3.0 per cent annually. These figures are critical because they could influence the Federal Reserve’s decision on interest rates at its September meeting.

A softer-than-expected CPI reading could bolster expectations for a 25-basis-point rate cut, signalling that the Fed views inflation as manageable and is prioritising economic growth amid signs of a slowing labour market. Conversely, a higher-than-expected figure could dampen hopes for immediate rate cuts, as persistent inflation driven by tariffs and supply chain pressures might force the Fed to maintain its current stance. This uncertainty has kept investors on edge, contributing to a cautious tone in global markets.

The recent executive order from President Trump extending the China tariff deadline by 90 days has introduced a layer of optimism, particularly in Asian equity markets. The decision, while light on specifics, signals a temporary de-escalation in US-China trade tensions, which have been a significant driver of market volatility in 2025.

Asian equity indices opened higher this morning, reflecting relief that the immediate threat of escalated tariffs has been deferred. This extension aligns with earlier trade agreements, such as the May 12 deal that paused additional tariffs and set US tariffs on Chinese imports at 30 per cent, while China lowered its tariffs on US goods to 10 per cent.

However, the fluid nature of trade policy under the Trump administration keeps markets wary. A social media post from the White House on May 30 suggested that China may have violated the agreement, raising the specter of renewed tariffs. Such unpredictability underscores the fragility of the current truce and its potential to disrupt global trade and inflation dynamics.

Wall Street’s reaction to these developments has been subdued, with major indices like the S&P 500, NASDAQ, and Dow Jones retreating slightly from near-record levels, declining by 0.3 per cent, 0.3 per cent, and 0.5 per cent, respectively. This pullback reflects investor caution ahead of the CPI data, as a higher-than-expected inflation reading could pressure risk assets, including equities and cryptocurrencies.

US treasury futures have shown limited volatility, with yields remaining rangebound, indicating that bond markets are also in a wait-and-see mode. The US Dollar Index, up 0.3 per cent, has benefited from this cautious sentiment, as investors seek safe-haven assets amid uncertainty. Gold, however, retreated 1.4 per cent to US$3,351 per ounce after Trump clarified that bullion imports would be exempt from tariffs, reducing its appeal as a hedge against trade-related inflation.

In the commodity markets, Brent crude oil edged up 0.1 per cent, consolidating at higher levels despite a lack of significant news flow. The oil market’s stability reflects a balance between demand concerns and supply dynamics, with OPEC+ reportedly considering a larger-than-expected production hike.

This development could cap upside potential for oil prices, particularly if trade tensions resurface and dampen global demand. The interplay between tariffs, inflation, and commodity prices remains a critical factor for investors, as higher input costs could further fuel inflationary pressures, complicating the Federal Reserve’s policy calculus.

The cryptocurrency market, meanwhile, has emerged as a bright spot amid the broader caution. Ethereum has outperformed Bitcoin in year-to-date gains, rising 29 per cent to US$4,311.58 compared to Bitcoin’s 28 per cent increase to US$120,020.83. Ethereum’s surge past the US$4,000 mark, a level not seen since December 2024, reflects growing institutional demand and inflows into US spot Ethereum exchange-traded funds (ETFs).

These funds have attracted US$5 billion in net inflows over the past month, with total assets under management reaching US$20 billion since their launch in July 2024. Digital asset treasury companies (DATs) are also stockpiling ETH, emulating the strategy pioneered by Bitcoin advocate Michael Saylor. This institutional buying has bolstered Ethereum’s price, despite a 0.9 per cent daily decline, and highlights the increasing integration of cryptocurrencies into mainstream finance.

Bitcoin, while slightly trailing Ethereum in year-to-date performance, has also seen significant gains, climbing above US$122,000 over the weekend. The total cryptocurrency market capitalisation has surged to US$4.1 trillion, reflecting renewed investor enthusiasm. The correlation between Bitcoin and US equity markets has strengthened since mid-July, suggesting that cryptocurrencies are increasingly viewed as risk assets sensitive to macroeconomic developments.

Options market activity underscores this dynamic, with Bitcoin options open interest at US$43 billion and Ethereum at US$13.9 billion, approaching record highs. Traders are positioning for volatility around the CPI release, with elevated open interest indicating both hedging against downside risks and bets on further upside momentum. Short-call covering in Bitcoin options suggests reduced bearish sentiment, but implied volatility is expected to remain high until the CPI data provides clarity.

From my perspective, the current market environment reflects a delicate balance between optimism and caution. The extension of the China tariff deadline offers a reprieve, but the lack of clarity on trade policy keeps investors on edge. The CPI report will be a pivotal moment, as it could either reinforce expectations for a dovish Federal Reserve or signal persistent inflationary pressures that delay rate cuts.

The resilience of cryptocurrencies like Ethereum and Bitcoin, driven by institutional adoption and ETF inflows, highlights their growing role as alternative assets in a volatile macroeconomic landscape. However, their correlation with equities suggests that a negative surprise in the CPI data could trigger a broader sell-off in risk assets.

The Federal Reserve faces a challenging path. Two Fed governors, Michelle Bowman and Christopher Waller, dissented in the last meeting, advocating for rate cuts due to signs of a slowing labor market and their belief that tariff-driven inflation may be transitory.

However, Fed Chair Jerome Powell has emphasised a data-dependent approach, and a higher-than-expected CPI reading could strengthen the case for holding rates steady. The labor market, while still robust, shows signs of softening, with recent revisions slashing job growth figures for May and June to 19,000 and 14,000, respectively. These figures, the lowest two-month job growth since April 2021, add pressure on the Fed to balance its dual mandate of price stability and maximum employment.

Asian markets’ positive response to the tariff deadline extension underscores the global sensitivity to US trade policy. However, the risk of retaliation from trading partners, such as the EU’s potential €95 billion countermeasures, looms large.

Tariffs have already driven price increases in categories like furniture, auto parts, and electronics, contributing to inflation expectations of 4.4 per cent in the coming year, according to the University of Michigan’s consumer sentiment survey. Despite these concerns, consumer sentiment improved in July to 61.8, reflecting resilience in the face of tariff threats and robust retail sales data.

In conclusion, the US CPI report serves as a critical catalyst. The interplay of trade policy, inflation, and monetary policy will shape market sentiment in the coming weeks. Cryptocurrencies, particularly Ethereum, are carving out a significant role in this environment, driven by institutional demand and speculative interest.

However, the risks of higher inflation and renewed trade tensions could disrupt the current rally in risk assets. Investors should remain vigilant, balancing opportunities in equities and digital assets with the need to hedge against potential volatility. The next few days will be crucial in determining whether the current cautious optimism gives way to renewed confidence or a retreat into risk-off sentiment.

 

Source: https://e27.co/why-tonights-inflation-report-could-shake-global-markets-to-their-core-20250812/

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