The global crypto scramble

plus. inflation stability in the driving seat, and what I was focusing on a year ago

“The truth is rarely pure and never simple.” – Oscar Wilde ||

Hello everyone!

I woke up to news of a ceasefire deal in the Israel-Gaza war, which feels almost too good to be true for now. It starts on Sunday, 33 hostages will be released (out of the 98 still in captivity), humanitarian aid will be allowed in, Israel will withdraw from the populated areas of the Gaza Strip, and will release hundreds of Palestinian prisoners. It’s not a great deal for either side, but that’s the difficult art of diplomatic compromise for you, and it’s for sure better than nothing. Let’s hope it holds and leads to another one six weeks from now.

Below, I look at how yesterday’s inflation print confirms my stability thesis (which I wrote about yesterday). I also highlight just some examples of how jurisdictions around the world are scrambling to introduce crypto frameworks after the US entered the regulation race.

And, I look back at what I was covering a year ago, and at how things have changed (or not).

IN THIS NEWSLETTER:

• Inflation stability in the driving seat

• The global crypto scramble

• A year ago

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WHAT I’M WATCHING:

Inflation stability in the driving seat

Ok, that was a good CPI report, better than I expected. But was it good enough to justify the wild market swings?

To summarize the data:

• Headline CPI increased 0.4% from November, in line with consensus forecasts and higher than November’s 0.3%.

• Energy prices accounted for roughly 40% of this increase.

• Year-on-year, headline inflation accelerated from 2.7% to 2.9%, also in-line with forecasts.

• The core CPI month-on-month growth came in at 0.2%, lower than consensus expectations of 0.3%, which would have been flat on November’s increase. This was the first monthly slowdown in the core measure since June.

• Year-on-year, core CPI inflation decelerated slightly to 3.2% from 3.3% - the median forecast had it holding steady. This was the first year-on-year drop in core inflation since July.

• The Fed’s preferred measure of supercore inflation (which strips out food, energy and housing) increased 0.21% month-on-month, the softest since July – more than half of that increase came from airfares.

(chart via Bloomberg)

So, there’s good news in there. But not enough yet to change the thesis I laid out yesterday: that inflation is not just sticky, but stuck.