Crypto Markets Slump as Global Macro Conditions Remain Stagnant

The global macro trading narrative centered on 'cooling US inflation and weakening consumption' this week. Despite energy shocks preventing monetary policy from shifting towards easing, the US July CPI rose only 0.1% month-over-month, with the year-over-year figure declining from 3.5% to 3.4%, indicating moderate underlying inflation.

However, tensions in the Middle East and supply disruptions in the Strait of Hormuz remain a major concern, with the IEA lowering its 2026 global oil demand and supply forecasts. Global inventories declined notably, causing WTI and Brent crude prices to settle at approximately $82.40 and $88.52, respectively.

As a result, the Fed is stuck in a classic dilemma of 'cooling growth but inflation still above target.' The July meeting held the federal funds rate at 3.50%, 3.75%, with internal disagreement over further hikes. Treasuries and the dollar briefly weakened following the week's inflation and consumption data, but the 10-year Treasury yield remained near elevated levels around 4.70%.