The macro landscape is shifting fast, with crypto, inflation, and the Federal Reserve at the center of the conversation. Over the past week, investors have navigated record ETF inflows, higher-than-expected inflation, and signs of weakness in the labor market, all while stocks and commodities broke new records.

Here’s what you need to know.

Crypto in the Spotlight

Bitcoin led the charge with more than $1.3 billion in ETF inflows over just two days, driven by BlackRock and Fidelity. Ethereum also showed strength, with $110 million in inflows and a rebound after yesterday’s weakness. Risk appetite is clearly back in crypto.

Inflation Surprise

U.S. inflation came in hotter than expected:

• Core CPI: +0.3% month-over-month
• Headline CPI: +0.4% month-over-month, the highest reading so far this year

If this pace continues, annual inflation could reach 5%, keeping pressure on the Fed and challenging the “soft landing” narrative.

Labor Market Weakness

Jobless claims climbed to a four-year high, signaling a softer labor market. Slower hiring and rising unemployment further reinforce expectations of rate cuts in the coming months.

The Fed’s Next Move

Markets are laser-focused on the September 17th FOMC meeting. The base case is a 25 bps cut, but with labor softening, there’s still a chance of a 50 bps cut if data continues to weaken.

Traditional Markets Rally

Despite macro uncertainty, equities pushed higher:

• Dow Jones: closed above 46,000 for the first time in history
• S&P 500 and Nasdaq: also hit fresh all-time highs
• Tech and AI stocks remain strong drivers for the Nasdaq

Commodities and Bonds

• Gold: reached a new inflation-adjusted record before pulling back
• Treasuries: 10-year yield dipped below 4%, easing mortgage rates
• Oil: extended its decline on renewed OPEC+ supply concerns

The macro environment remains a tug-of-war between hot inflation and a weakening labor market. Crypto is benefiting from renewed inflows, equities continue to set records, and investors are positioning ahead of the Fed’s next move.

Risk appetite is alive, but volatility is elevated, and likely here to stay.