TheBRRR’s Thoughts

GM.

Last night’s debate went about as poorly as possible for incumbent President Biden.

Prediction markets now have Biden at 32% to win reelection - down from 45% the day before the debate.

Trump’s victory odds climbed from 52% to 58%, and the rest of the gains went to speculative replacements for Biden with Gavin Newsom leading the charge.

Risk assets reacted positively in real-time but have since retraced the gains.

Volatility remains muted overall, as expected.

Crypto remains suppressed as bitcoin supply overhangs from Mt. Gox and the German government loom.

Solana is seeing some relative strength vs bitcoin and ether as VanEck and 21Shares surprised markets by filing for SOL ETFs this week.

No one expects the current admin to greenlight the ETF, but the potential approval/denial deadline date would technically be in 2025 - after the election where we might get a new regulatory regime from the crypto-friendly Trump admin.

Democrats Panicking After Presidential Debate, Calls for Biden Replacement Grow

WHAT HAPPENED

• Top Democratic fundraisers are alarmed by President Joe Biden's poor debate performance against Donald Trump.

• Just 15 minutes into the debate, fundraisers contacted CNBC, expressing serious concerns.

• Biden's performance included several gaffes and moments of confusion, leading to criticism from key donors and advisors.

WHY IT MATTERS

• Fundraiser Reaction: Key Democratic fundraisers and advisors are now questioning Biden's viability as a candidate.

• Immediate Concerns: Fundraisers are worried about the potential impact on Biden’s campaign, with some suggesting he should consider dropping out.

• Performance Issues: Biden’s debate performance raised doubts about his stamina and coherence, crucial factors for voter confidence.

• Debate Impact: Trump's attacks on Biden's stumbles were sharp, potentially swaying undecided voters.

KEY QUOTES

• "Disaster... Everyone I’m speaking with thinks Biden should drop out," said a Biden donor.

• "Game over," declared a longtime Democratic campaign advisor.

• Biden’s debate performance was described as an "absolute train wreck" by an advisor of a top Democratic megadonor.

CNBC

Core PCE, Fed’s Inflation Metric, Lands In-Line With Expectations

WHAT HAPPENED

• Inflation Gauge Eases: The Federal Reserve’s preferred inflation measure, the Personal Consumption Expenditures (PCE) index, showed prices rose at a slower pace in May.

• PCE Data: Core PCE rose 2.6% year-over-year in May, down from 2.8% in April. Month-over-month, it increased by 0.1%, also down from 0.2% in April.

• Fed’s Response: Despite the positive inflation data, the Fed is unlikely to cut rates at its upcoming July meeting.

• Market Expectations: Economists predict that the Fed might cut rates later in the year, potentially as early as September.

WHY IT MATTERS

• Path to Rate Cuts: The slowing inflation gives the Fed more confidence in potentially cutting rates if needed, but immediate cuts are not expected.

• Economic Growth Consideration: Strong economic growth is a factor in the Fed's decision to hold off on immediate rate cuts.

• Future Projections: Economists like Paul Ashworth foresee core PCE inflation possibly falling to 2.5% in June, making a September rate cut plausible.

• Fed Officials’ Stance: Fed officials, including Raphael Bostic and Michelle Bowman, express cautious optimism but are not committed to immediate rate cuts. They highlight ongoing risks to inflation from geopolitical events and the job market

• Paul Ashworth, Capital Economics: "Consumers appear to be finally capitulating under the pressure of higher rates."

Yahoo Finance

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The BRRR is meant for informational purposes only. It is not investment advice. Please consult with your investment, tax, or legal advisor before making any investment decisions.ll