Trading Desk Insights
Risk assets caught a bid Tuesday after softer-than-expected core CPI reinforced the market’s rate-cut narrative. Core U.S. inflation printed at 2.6% in December versus 2.7% expected, not a game-changer, but enough to keep the “disinflation is working” story alive as the Fed weighs its next move. Fed funds futures are still leaning toward two 25bp cuts this year, with June penciled in as the starting point.
Crypto responded well to the data. BTC pushed through $93K on rising volume, while altcoins outperformed as traders rotated into higher-beta plays, including privacy coins and memecoins. That said, the setup isn’t clean across the board, U.S. equities faded after the initial CPI pop, suggesting macro optimism remains fragile. Volatility is still contained, but traders are staying cautious ahead of the next batch of economic catalysts.
On the policy front, a leaked partial draft of the U.S. Senate’s crypto market structure bill shows early language aimed at protecting DeFi participants. Several sections, including stablecoin rewards, remain blank or under negotiation, highlighting just how unfinished the framework still is.
JPMorgan threw a bit of cold water on the rate-cut consensus, projecting no cuts through 2026 and flagging a potential 25bp hike in 2027 as the next move. That’s a sharp contrast to market pricing and crypto’s forward-looking positioning, which continues to lean bullish on eventual easing. The bank’s view reflects resilient growth and sticky inflation, factors that could keep the Fed sidelined longer than risk assets are currently discounting.
Elsewhere, memecoin drama made headlines again. Former NYC mayor Eric Adams is facing allegations tied to the rapid launch and collapse of the NYC Token. On-chain data shows a wallet linked to the deployer pulled roughly $2.5M in liquidity shortly after launch, returning only part of it. The token’s market cap cratered more than 80%, reigniting rug-pull accusations and reminding traders that liquidity risk cuts both ways, especially in meme land.
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This research is for informational use only. This is not investment advice. Other than disclosures relating to Secure Digital Markets this research is based on current public information that we consider reliable, but we do not represent it is accurate or complete, and it should not be relied on as such. The information, opinions, estimates, and forecasts contained herein are as of the date hereof and are subject to change without prior notification. We seek to update our research as appropriate.
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