This morning, looking back at the macro data of the US, I noticed a rather interesting detail: the PPI for December increased more than expected, especially month-over-month. The Producer Price Index m/m rose to 0.5%, much higher than the previous level of 0.2%. Year-over-year, the PPI remains around 3%, with core PPI also holding at 3% y/y. It can be seen that cost pressures from producers have not yet cooled down.
If only pure data is read, this is not pleasant news for risk assets. A high PPI often means that 'input' inflation is still persistent, and the Fed will find it difficult to loosen policy as quickly as the market once hoped. But the interesting thing is that the crypto market today is not reacting too negatively. The reason, in my opinion, is that the macro story is being 'split'.
At the same time, Michael Saylor stated that “Soon, Kevin Warsh will be the first pro-Bitcoin Chairman of the Federal Reserve.” This statement may not be an accurate prediction, but it reflects something more important: the narrative is shifting from short-term data to long-term policy expectations.
Kevin Warsh is the name that prediction markets are heavily betting on for the next Fed Chair position. Warsh is not the type to be “easygoing” on inflation, but he is also not ideologically opposed to Bitcoin or crypto. For a segment of the market, simply having a Fed Chair that is not hostile to Bitcoin represents a significant change from the past.
My insight here is: the flow of money is temporarily ignoring PPI to look further ahead. Inflation data may push rate cut expectations back a few months, but if the market believes that the power structure within the Fed is about to change, then the psychological impact of that is greater than a few m/m numbers.
This clearly indicates the current phase of the cycle. We are in the stage of pricing future policy. The market is starting to ask: who will be the decision-maker in the next 1–2 years, and how do they view crypto? In this context, high PPI is a short-term headwind, but not enough to reverse the larger story.
For you guys, I think this is still a phase where it's better to closely observe the market's reaction rather than chase the headlines. When bad data doesn't lead to a price drop, it's usually because big money is looking in a different direction. And right now, that direction is the next Fed Chair, not just a PPI report for December $BTC .
