Tariff Reversals, Bond Rout & Crypto’s Calm

Investors are dumping the 30-year US Treasury — the world’s most iconic “risk-free” asset — as ballooning deficits and mounting debt erode confidence in Washington’s long-term fiscal credibility. The shift is stark: funds like DoubleLine, Pimco, and TCW are now stacking short-term bonds, chasing yield without locking into long-duration risk.

This flight from the long end has proven prescient in 2024. Globally, long-maturity demand has crumbled as spending-heavy governments push rates higher, and inflation stays sticky. But amid the sell America trade, one asset class is standing firm: crypto.

Bitcoin hit a new all-time high above $111,000 last week before cooling off. With macro anxiety high and policy fog thickening, digital assets remain a barometer for uncertainty — and a hedge when risk-free starts looking risk-full.

Why this matters for crypto:
Crypto is benefiting from eroding trust in traditional safe havens. The more the Treasury market convulses, the stronger the case becomes for Bitcoin as an alternative reserve asset — especially when monetary and fiscal policy start contradicting each other.

? US Macro: Jobs, ISM & the Tariff Rerun

ISM Manufacturing / Services (Mon/Wed):
A 30% tariff cut on Chinese goods last week helped cool trade tensions — but don’t expect that optimism to lift business sentiment right away. Forward-looking indices are still constrained by hiring uncertainty and rising input costs.

Jobs Report (Fri):
All eyes on May payrolls. Hiring remains tepid, layoffs haven’t accelerated, but there's a clear pause in employer momentum. B.R.O. expects that trend to drag into summer. The DOGE budget squeeze and Liberation Day distortions make it harder to parse clean trends, but any softness will fuel rate cut hopes.

Why this matters for crypto:
The employment data will reveal how much tariffs are hitting the real economy. If hard data shows slowdown while confidence keeps falling, crypto could outperform as a play on policy lag — especially if the Fed holds fire through Q3.

?️ Tariff Drama: Legal Wins, Market Shrugs

Last week’s trade court ruling invalidated large chunks of Trump’s existing tariff regime, threatening 8% out of the current 13% import tax rate. But markets didn’t blink. The assumption? The administration will either find new legal cover or go harder.

That creates two options:

1. Negotiation window — Use the ruling as leverage to ease trade tensions.
2. Escalation path — Let other countries assume the US lacks tariff stamina, then reassert strength via more aggressive moves.

B.R.O. sees both as 4D chess. For now, the base case holds: no immediate tariff rollbacks, just more noise and indecision.

Why this matters for crypto:
TACO — Trump Always Chickens Out — remains the prevailing bet in crypto. Bitcoin’s muted response to tariff volatility shows investors are less concerned about policy shifts and more focused on regime-level uncertainty. If anything, the ruling adds another layer of chaos to an already noisy macro picture.

? Confidence Collapse vs. Data Drift

Consumer and business sentiment has dropped sharply, but “hard data” on spending and hiring still holds — for now. The divergence has widened, making the June jobs report even more critical.

This hard-vs-soft split is mirrored in Europe. Inflation data this week will likely reinforce the disinflation trend, with lower energy prices pulling CPI back to target.

Why this matters for crypto:
Crypto thrives when traditional data signals diverge. It creates trading windows, particularly when central banks are uncertain which signal to follow. That’s where we are now — and that’s when digital assets shine.

?? Europe Watch: ECB Cut Incoming

Inflation (Tue):
May inflation fell to 2.0%, with core down to 2.5% after April’s Easter spike reversed. Energy disinflation remains a strong tailwind.

ECB Meeting (Thu):
A 25bps cut is all but locked in. Lagarde will try to balance easing with geopolitical caution, but with inflation heading lower and growth softening, the doves are in control.

Why this matters for crypto:
Rate divergence between the Fed and ECB could drive EUR weakness — which in turn supports USD and makes crypto relatively more attractive as a non-sovereign alternative. Eurozone easing also reinforces the global pivot back toward accommodation.

? Crypto Moves: ATH in Sight, But Momentum Stalls

Bitcoin’s push above $111K last week marked a key psychological win. But with macro risk off the charts and equities choppy, bulls may need a clean macro catalyst to push further.

Ether has outperformed in recent sessions, but altcoin rotation has cooled. Market positioning is cautious heading into Friday’s data.