On Monday, White House press secretary Karine Jean-Pierre said the administration expects high inflation mainly due to high food and energy components. The core inflation, which strips out the volatile food and energy component, is seen rising 0.6% month-on-month, amounting to an annualized growth of 5.8%. The data is likely to show the cost of living rose 1.1% month-on-month, bringing the annualized figure to a new four-decade high of 8.8%. Labor Department is scheduled to release June’s consumer price index figure. Further, the Fed funds futures have priced a 50 basis point hike in September and 25 basis points hikes at the November and December meetings. The Fed is likely to raise borrowing costs by 75 basis points later this month, bringing the benchmark interest rate to a range of 2.25% to 2.5% from 0% to 0.25% at the start of 2022. That’s because, inflation is showing no signs of slowing down and the Fed is unlikely to apply brakes to policy tightening anytime soon.

And to the dismay of bulls cheering the bottom signals on blockchain indicators, the path of least resistance for the real yield appears to be on the higher side. The record negative correlation means the possibility of Bitcoin plunging below the June low of $17,601 cannot be ruled out should the real yield continue to rise. While the leading cryptocurrency has dropped nearly 57%, the tech-heavy Nasdaq index and gold are nursing a 27% and 5.2% loss, respectively.

The real yield has surged by more than 172 basis points to 1.72% this year, thanks to Federal Reserve’s resolve to drain liquidity with rapid-fire interest rate hikes and balance sheet run-off to fight rampant inflation. So, it’s no surprise that Bitcoin, technology stocks and gold have taken a beating this year alongside an uptick in the real yield. Therefore, the higher the real yield, the lesser the incentive to chase returns from other assets like cryptocurrencies, stocks and gold. You hereby agree that we are not providing our own opinions, advice, or recommendations.A positive real yield means the bond payout is exceeding the market-based measures of inflation expectations. While we endeavor to publish and maintain accurate information on external listings, we do not guarantee the accuracy, completeness, or usefulness of any information on this site, nor do we adopt nor endorse, nor are we responsible for, the accuracy or reliability of any information submitted by other parties.

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Bitcoin core price