The CPI (U.S. inflation indicator) wasn’t the only inflation story last week. U.S. diesel prices have risen above $6 per gallon for the first time, and the price of oil in Shanghai rose significantly as China appears to be slowing the drawdown of its reserves—a bad sign for global inflation that aligns with Iran’s interests ahead of the midterms. Coupled with robust labor market data and strong inflation, the Fed has little room to maneuver. This is also unfavorable for the Treasury: Interest rate hikes directly impact debt service costs, while buybacks have so far failed to depress long-term yields.
The bigger factor for growth is likely to be the wave of AI investment. Whether the massive AI spending will pay off is becoming more questionable: Frontier models do not consistently outperform cheaper open-source alternatives, and the circular investment structure could become a problem if rising long-term interest rates make financing more difficult.
The bottom line is that monetary policy #bitcoin short-term potential. Both plausible outcomes—a recession accompanied by interest rate cuts, or yield control that tips into fiscal dominance—boil down to the same devaluation scenario, an environment that $GOLD and $BTC (+6,09 %) favors.
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