Will the Fed focus on breakevens, which are already at or below 2% in the short term, or on rising consumer concerns?
The Fed itself tends to rely on breakevens because they reflect institutional capital allocation, while consumer surveys often lag and can be heavily influenced by volatile day-to-day costs like energy and food. Therefore, the argument that falling breakevens are bullish for bitcoin still holds.
But the central bank may not completely ignore Main Street sentiment, which could become self-reinforcing, especially if catalysts like energy prices remain volatile.
And guess what? The US-Iran ceasefire has broken down. The two sides exchanged airstrikes early today, sparking a roughly 5% jump in oil benchmarks. Bitcoin has fallen back to $62,000 and could fall further if panic spreads to Wall Street later today.
Analysts are also keeping an eye on the minutes from the Fed’s June meeting, which is expected later today.
“Wednesday’s Fed Minutes are the stick. With longer so crowded and funding this realm, a hawkish reading is exactly the spark that flushes leverage and strategy approval hangs over every rally. We respect the rejection, we don’t trust it, and we keep size honest into the minutes,” analysts at Marex said in an email.
