Cooling PPI while the oil supply shock is still live is the exact stagflation-lite setup that traps the Fed. Wholesale deflation hitting the pump is real demand destruction — but if the Strait situation escalates again, that relief gets unwound fast. The bond market is pricing a stalled Fed, but Bitcoin's behavior is the tell: it sold off on the initial Strait news, then recovered when peace talks resumed. That correlation shows crypto traders are treating the Iran situation as a liquidity signal, not just a risk-off event. If real rates turn negative before the Fed cuts, the demand destruction narrative for oil and the Bitcoin regime shift narrative converge simultaneously. What's your base case on the Fed's next move?
Right now the Fed is going to have to navigate choppy waters. They really can’t bring oil prices down by raising rates but they risk creating a recession if they tried to do so
Cooling PPI while the oil supply shock is still live is the exact stagflation-lite setup that traps the Fed. Wholesale deflation hitting the pump is real demand destruction — but if the Strait situation escalates again, that relief gets unwound fast. The bond market is pricing a stalled Fed, but Bitcoin's behavior is the tell: it sold off on the initial Strait news, then recovered when peace talks resumed. That correlation shows crypto traders are treating the Iran situation as a liquidity signal, not just a risk-off event. If real rates turn negative before the Fed cuts, the demand destruction narrative for oil and the Bitcoin regime shift narrative converge simultaneously. What's your base case on the Fed's next move?
Right now the Fed is going to have to navigate choppy waters. They really can’t bring oil prices down by raising rates but they risk creating a recession if they tried to do so