U.S. June CPI slowed to 3.5% year over year, while core CPI was nearly flat on a monthly basis. On the surface, inflation looked softer. New Huo Research said the market should not turn optimistic too soon.
The institute said the drop in June CPI was driven mainly by energy. Excluding food and energy, core goods prices were still rising, up 0.7% in March, 0.7% in April, 0.2% in May, and 0.2% in June. On the producer side, core goods in PPI rose 5.1% year over year.
Federal Reserve Chair Walsh said, “this inflation reading did not perfectly reflect underlying inflation conditions.” New Huo Research added that financial services and inpatient medical care within core services were still increasing, and June core PCE would most likely post a slight positive gain.
Fed stance remains hawkish
According to the report, Walsh has repeatedly stressed the Fed’s independence since taking office and pledged “zero tolerance” for inflation. In that framework, even if inflation pulls back in the short term, the Fed is unlikely to pivot to a dovish stance easily.
New Huo Research also said that if energy prices move higher again because of the Middle East situation, inflation expectations could pick up once more. That would leave the Fed’s hawkish posture in place and keep pressure on risk assets.
Storage semiconductors face four structural pressures
The report said inflation risks are running alongside stress in storage semiconductors. Last week, Micron fell 13.3%, SK Hynix dropped 18.24%, and South Korea’s KOSPI index tumbled 9.48% and triggered a circuit breaker.
New Huo Research argued this was not a routine round of profit-taking. With geopolitical risk rising and AI-driven gains having already built up large unrealized profits, investors have started questioning how sustainable AI capital expenditure really is. The central issue, it said, is when those massive investments will turn into actual returns.
The institute highlighted deleveraging in the Korean market as the point that deserves the closest attention. Korea’s margin financing balance and leverage ratio are at historically elevated levels. Regulators have stepped in to assess the systemic risk of single-stock leveraged ETFs, and multiple brokerages have raised margin requirements. Even so, New Huo Research said deleveraging is still far from a stage-based completion, and near-term volatility is likely to stay amplified.
Crypto outperformed traditional markets last week
Compared with the sharp swings in traditional markets, crypto was relatively steady last week. BTC rose 1.3% and ETH gained 3.4%. New Huo Research said that amounted to a period of independent performance for crypto.
On flows, U.S. spot Bitcoin ETFs shifted from large net outflows to continued net inflows. Coinbase’s negative premium kept narrowing. On-chain, the Robinhood Chain ecosystem saw a burst of activity: its DEX recorded more than $3.1 billion in trading volume in its first week, ranking among the global top five, while stablecoin balances on the chain remained above $260 million.
CLARITY Act in focus
On the policy side, the U.S. Senate could advance review of the CLARITY Act this week. The bill is currently listed as No. 423 on the legislative calendar.
New Huo Research said the main hurdle is resolving Democratic concerns around stablecoin oversight and anti-money laundering compliance. Before the August recess, it said, lies the last realistic window for the bill to pass within 2026.
Near-term standalone bull case remains limited
Taking these factors together, New Huo Research said the probability of crypto entering a standalone bull market in the short term is low. With recurring inflation risk, a hawkish Fed, and wider volatility across global equities, risk assets as a whole remain under pressure, and crypto is unlikely to stay fully insulated.
Still, the institute said crypto’s fundamentals are improving. Continued ETF inflows, a narrowing Coinbase premium gap, and stronger on-chain activity all point to firmer support near the market bottom. On the technical side, BTC and ETH have shown solid support around their daily moving averages and the middle line of the Bollinger Bands, and both have recently staged a decent rebound within a range.
New Huo Research maintained its earlier view that Bitcoin around $60,000 remains an attractive allocation zone on a risk-reward basis. From current levels, downside risk appears relatively manageable, while upside depends on when the macro backdrop turns and how fast policy catalysts such as the CLARITY Act move forward. The report said the key signal for a real bull market would be a second confirmation of bottoming, combined with a macro shift.