CPI slides into negative growth + PPI collapses—yet the Fed is still “stubborn with its mouth”—

This “data slaps back” drama—BTC wins big

On July 14, CPI posted its first month-over-month negative growth in six years.

On July 15, PPI came in at 5.5% year-over-year versus 6.2% expected, directly blowing up all analysts’ faces. Month-over-month it fell 0.3%, the largest one-month decline since April 2020.

Two days. Two sets of data. One slap after another.

So what did the Fed say next?

Voith: “Some may say the job is done—I don’t see it that way.”

Waller is even harsher: If inflation keeps making no progress for a long time, rate hikes should be considered.

You don’t buy the CPI negative growth. You still don’t buy the PPI collapse.

First, look at the data.

June CPI fell 0.4% month-over-month, while expectations were only -0.1%—the actual drop is four times the expected decline. Core CPI rose 2.6% year-over-year versus 2.8% expected. Energy prices plunged 5.7% month-over-month, pressing inflation to the ground and rubbing it in.

PPI is even more extreme—down 0.3% month-over-month, with forecasts unchanged. Core PPI rose 4.7% year-over-year versus 5.2% expected.

One detail: all four sets of prior readings were revised downward. This shows the data from the past few months was already inflated, and the current cooling is even sharper than you think.

The market went into full frenzy. The probability of a rate hike in July plunged from 46% to 15%, then further to 10%. Two-year Treasury yields crashed by 14 basis points in a single day. Bitcoin surged through $65,500 intraday. Total crypto market capitalization broke above $2.3 trillion.

The market is voting with its feet, while the Fed is still using its mouth to talk about rate hikes.

So the question is—why is the Fed so hard-headed with its “talk”?

Because the cooling in June CPI relied on a sudden crash in oil prices. In June, the energy index fell 5.7% month-over-month, with gasoline plunging 9.7%.

And why did oil prices fall? The U.S.-Iran ceasefire, and the Strait of Hormuz reopened.

But the ceasefire already broke down. On July 8, the U.S. carried out airstrikes, Iran imposed blockades, and Brent jumped back from $70 per barrel to $86.

June CPI reflected a world that no longer exists.

The Fed knows this. What are they afraid of? They fear that once they loosen up and say “inflation is done,” financial markets will instantly celebrate—U.S. stocks soar, BTC rockets, and financial conditions ease across the board—then inflation will rebound in minutes and show you right then and there.

So what are they doing? Managing expectations—using words to talk about rate hikes, buying time.

But there’s a truth that’s most favorable to BTC:

As long as the data truly cools, capital will sprint and front-run early. By the time the Fed is forced to turn dovish, BTC will already be nowhere near where it started.

Look—rate hike odds fell from 46% to 10%, Treasury yields collapsed, the dollar dropped—these are real money flows, not a few lines from the Fed that can be blocked with words.

Voith can be stubborn with his mouth, Waller can go hawkish, but the bond market doesn’t listen to them, traders don’t listen to them, and BTC definitely doesn’t listen either.

Never panic-sell when the Fed tries to “manage expectations.”

Watch which direction they ultimately end up “admitting fault” to.

At the moment, the lay of the cards is clear: the data has already slapped the officials twice. CPI—slap. PPI—slap. Whether the Fed’s face is swollen or not doesn’t matter; what matters is whether your position is swollen.

The PCE data at the end of July, plus oil prices that keep climbing—these two things will decide who loses first in this “data vs. statements” showdown.

But no matter who wins, BTC is already waiting above $65,000.

“The Fed’s mouth is the least valuable asset in the market. And data is the only thing that never lies.”

With CPI turning negative + PPI collapsing, do you still believe the Fed will hike rates? #PreIPOs第二期OpenAI认购 #USDT充值理财双重奏 #BTC反弹触及65000美元 $BTC $ETH $XAU