TL;DR

U.S. CPI jumps to 2.7% y/y; Trump escalates tariffs; crypto regulation stalls, energy/tech investment ramps up.

Highlights

• U.S. June CPI rose 0.3% m/m and 2.7% y/y; core CPI up 2.9% y/y, driven by tariffs on Chinese goods1.
• Fed expected to hold rates in July but signals watchfulness on trade-driven inflation1.
• Trump threatens new tariffs on countries not opening to U.S. trade3; 50% tariff on Brazilian imports starts August 14.
• Trump signals Treasury Secretary Bessent as possible Fed Chair candidate but likely to remain at Treasury for now2.
• U.S. and European allies set end-August deadline for Iran nuclear deal, with threat of renewed UN sanctions if talks fail5.
• WTI crude fell 0.7% to $66.52 amid conflicting API inventory data; EIA report due Wednesday6.
• Trump to sign executive order allowing 401(k)s to access private equity and credit investments7.
• House GOP hardliners block crypto bills, stalling regulatory clarity; crypto stocks like Coinbase declined late8.
• Cantor Fitzgerald-backed SPAC nears $4B bitcoin deal with Adam Back, signaling continued institutional crypto interest9.
• Trump announces $92B in new private-sector commitments for U.S. energy and tech, including $70B for Pennsylvania AI and energy projects1014.
• Russian drone and missile attacks intensify on Ukrainian cities, raising geopolitical risk for Eastern Europe11.
• Pentagon to withdraw 2,000 National Guard troops from Los Angeles as security situation stabilizes13.

Commentary

U.S. inflation data for June showed a notable acceleration, with tariffs on Chinese imports clearly feeding through to consumer prices1. The 2.7% headline CPI and 2.9% core reading keep the Fed in a holding pattern for July, but policymakers are now more alert to the risk that trade-related inflation could persist1. This dynamic, combined with the administration’s ongoing tariff threats—including a 50% levy on Brazilian goods4 and talk of further action against other countries3—adds uncertainty for both equities and fixed income, particularly in sectors exposed to global supply chains and consumer spending.

Commodities saw mixed signals, with WTI crude slipping after the American Petroleum Institute reported sharply conflicting inventory data—either a massive 19 million barrel build or a modest 839,000 barrel increase6. The EIA’s official numbers on Wednesday will be closely watched, especially as the Iran nuclear talks approach a late-August deadline5. Failure to reach a deal could trigger renewed UN sanctions, potentially restricting Iranian oil exports and adding volatility to energy markets5.

In policy and regulatory news, Trump’s expected executive order to open 401(k) plans to private-market assets could boost flows to private equity and credit, with implications for asset managers and alternative investment vehicles7. Meanwhile, the failure to advance major crypto regulation in the House leaves the digital asset sector in limbo, though institutional appetite remains evident with Cantor Fitzgerald’s $4 billion bitcoin SPAC deal nearing completion89.

On the investment front, Trump announced $92 billion in new private-sector commitments for energy and technology, including a $70 billion focus on Pennsylvania’s AI and energy infrastructure1014. These initiatives may support select industrial and tech names, but investors should remain cautious given the broader macro headwinds from trade policy and inflation. Geopolitical risk remains elevated with intensified Russian attacks in Ukraine, which could have spillover effects on risk sentiment and commodity markets11.