The Federal Reserve’s favorite inflation gauge just delivered its coolest monthly reading in months — and the market responded by raising the odds of a September rate hike. Core PCE rose only 0.1% in June, below the 0.2% economists expected, easing the annual rate to 3.3% from May’s three-year high of 3.4%, according to Thursday’s Bureau of Economic Analysis release covered by Fox Business and CNN Business. Headline PCE cooled to 3.7% from 4.1%. Yet as of Friday morning, July 31, 2026, CME FedWatch prices roughly 81% odds of at least a quarter-point hike at the September 16 meeting — up from 72.3% on decision eve. Bitcoin, for its part, is climbing anyway: BTC trades near $65,000, up about 2.1% over 24 hours, its strongest print since before Fed week.

The reason the soft print didn’t soften the Fed math is sitting in the commodity tape. Oil is closing out its biggest monthly gain since March — U.S. crude up roughly a fifth in July — with WTI holding near $84 after an $8-plus weekly range and Brent settling around $89, per Bloomberg’s July 31 oil wrap. The U.S.–Iran pause that briefly knocked crude below $90 has effectively ended, The Hill reports, keeping Strait of Hormuz risk premium in the price. June’s cooling, in other words, is last month’s news: the energy shock now in the pipeline is exactly what Wednesday’s three Fed dissenters — and Chair Warsh’s “only a target, and it is 2 percent” press conference — were warning about.

A green tape on an Extreme Fear morning

Crypto’s reaction has been quietly constructive. Bitcoin’s move to ~$65,023 (+2.09% in 24 hours, on $26.6 billion of volume) leads a total crypto market capitalization back to roughly $2.3 trillion, per Friday market data from CoinGabbar, with BTC dominance at 56.3% and ether holding near 10%. Sentiment trackers disagree about the mood, as they have all month: the classic Fear & Greed Index reads 25 (“Extreme Fear”), while CFGI’s multi-factor version sits at 44 (“Neutral”) — we cite both, per our standing rule when providers diverge. Either way, the flow backdrop finally offered bulls something: Farside’s settled table shows the spot Bitcoin ETF complex snapped its four-session outflow streak on decision day, printing +$32.1 million on July 29 with BlackRock’s IBIT absorbing +$89.8 million against outflows at Fidelity’s FBTC (−$43.1M) and ARKB (−$14.6M), per data tracked by Farside Investors.

Strategy’s $8.2 billion quarter — and the sales nobody can unsee

The other overnight story came from the largest corporate Bitcoin holder. Strategy (Nasdaq: MSTR) reported a net loss of $8.22 billion for Q2 2026 — a diluted loss of $24.45 per share against estimates near −$2.19 — driven almost entirely by an $8.32 billion loss on its digital assets under fair-value accounting, with Bitcoin’s carrying value at $49.67 billion as of June 30, per TheStreet and the company’s official release. The quarter also confirmed what five weeks of silent 8-Ks had implied: Strategy has become a seller. The company disposed of 3,588 BTC for roughly $216 million between June 29 and July 5 — its largest Bitcoin sale ever, at an average near $60,000 — under a new Digital Credit Capital Framework that authorizes up to $1.25 billion of Bitcoin monetization to fund reserves and buybacks. Remarkably, the stock shrugged: MSTR reversed a −2% premarket dip to close slightly green near $96.82, and Citi reiterated a Buy with a $260 target, citing lower balance-sheet risk. Our full grading of the Strategy markers is in today’s analysis.

Big Tech’s split verdict helps the risk tape

Equity futures got their own lift overnight from Amazon, which beat on every line — $200.6 billion revenue, AWS up 37% (its fastest growth in 18 quarters), EPS of $5.75 — and jumped more than 9% after hours, per CNBC. Apple beat on earnings but slid over 6% on weak, supply-constrained guidance. The AI-capex tally that matters for Bitcoin miners keeps climbing: CEO Andy Jassy said Amazon expects roughly $220 billion of capital spending this year. Our miner-impact update has the full read-through.

What’s on the tape today

  • September odds, week’s close. Whether hike odds end the week above or below the mid-60s decides the J1 marker we set on July 30 — and right now the soft PCE print is losing that argument to oil.
  • Farside’s July 30 cell. One settled inflow does not make a trend; a second consecutive positive print would be the first back-to-back inflows since mid-July.
  • Strategy follow-through. Watch whether MSTR holds the $85–$110 band that our July 28 analysis flagged as the equity market’s verdict on dividend stress.

As of publication (early U.S. hours, July 31, 2026), Bitcoin trades near $65,000, ether near $1,990, and the crypto market has done something it failed to do all through Fed week: rally into bad-for-bonds news. The test is whether it can keep doing so while the Fed’s next move is being priced off a barrel of oil rather than a BEA spreadsheet. For background on how PCE feeds the Fed’s reaction function, see our core PCE investor guide.

FAQ

Why did rate-hike odds rise if inflation cooled?

Because markets price the future, not last month. June’s PCE data predates July’s oil shock — U.S. crude rose about 20% in July as the U.S.–Iran pause collapsed — and three FOMC members already dissented in favor of a hike on July 29.

What did core PCE actually print for June 2026?

+0.1% month-over-month (versus 0.2% expected) and 3.3% year-over-year, down from 3.4% in May. Headline PCE eased to 3.7% from 4.1%.

Is Bitcoin decoupling from stocks?

Two green sessions against a hawkish backdrop is evidence of relief, not decoupling. The Dow’s 840-point Fed-day drop versus BTC’s green close was notable, but structural flow support remains thin.

Did the Bitcoin ETF outflows stop?

The four-session, ~$526 million outflow cluster ended on July 29 with a +$32.1 million net inflow, led by IBIT’s +$89.8 million. The July 30 cell had not settled at publication.

Did Strategy really sell Bitcoin?

Yes — 3,588 BTC for about $216 million between June 29 and July 5, its largest disposal ever, disclosed alongside Q2 results under its new capital framework.

Investment disclaimer: This article is for informational and educational purposes only and does not constitute investment, financial, legal, or tax advice. Bitcoin and cryptocurrencies are volatile assets; you can lose some or all of your capital. Always do your own research and consult a licensed financial advisor before making investment decisions.