The FOMC meeting on June 16–17. The newly appointed Federal Reserve Chair, Kevin Warsh, presided over the decision-making for the first time. Although he kept the target interest rate range at 3.50%–3.75%, unchanged, the dot plot saw a major upward revision to the inflation and interest-rate path. Nine officials expect at least one rate hike before year-end, and the market has started re-pricing for “rate hikes rather than rate cuts,” putting immediate pressure on risk assets.

Inflation data was also unfavorable. The U.S. May CPI rose 4.2% year over year, the highest in three years. The main driver was the Iran conflict pushing up energy prices. Core CPI also reached 2.9%, still far from the Federal Reserve’s 2% target.

Liquidity continues to bleed out. U.S. spot Bitcoin ETFs saw a significant net outflow in June, at one point reaching $3.4 billion in a single week— the largest weekly record since the ETFs began trading in January 2024. Over three weeks, total outflows amounted to $4.21 billion. Fortunately, recent inflows of about $86 million into BlackRock’s IBIT suggest a hint of stabilization.