Crypto Rate-Cut Narrative Stumbles on Sticky Inflation and Strong Jobs Data

The latest U.S. economic releases have dealt a blow to the narrative that crypto traders had been relying on, which predicted aggressive rate cuts by the end of 2026.

Weekly jobless claims came in at 197,000 for the week ending July 25, below the expected 200,000, while June's core PCE inflation reading was 3.3% year-over-year, matching forecasts but offering little evidence that inflation is moving toward the Fed's target of 2%.

This combination leaves little room for rate cuts, and the data directly shapes the cost of capital in the crypto market, making a tighter environment historically unfavorable for speculative assets that rely on cheap leverage.