Will the Fed focus on the breakevens, which are already at or below 2% at the short end, or on rising consumer concerns?
The Fed itself tends to trust breakevens because they reflect institutional capital allocation, while consumer surveys frequently lag behind and can be heavily influenced by volatile everyday costs like energy and food. Hence, the argument that falling breakevens are bullish for bitcoin still holds.
But the central bank may not entirely ignore Main Street sentiment, which can become self-reinforcing, especially if catalysts like energy prices remain volatile.
And guess what? The U.S.-Iran ceasefire has collapsed. The two sides exchanged airstrikes early today, triggering a roughly 5% jump in oil benchmarks. Bitcoin has fallen back to $62,000 and may drop further if the panic spreads to Wall Street later today.
Analysts are also watching the minutes from the Fed’s June meeting, due later today.
“Wednesday’s Fed minutes are the pin. With longs this crowded and funding this rich, a hawkish read is exactly the spark that flushes leverage, and the Strategy authorization hangs over every rally. We respect the bounce, we do not trust it, and we keep size honest into the minutes,” analysts at Marex said in an email.