Bitunix Analyst: Geopolitics Lifts the Risk Premium Again — but Core Inflation Remains the True Deciding Factor

BlockBeats News, July 14th. The US has announced a blockade of Iranian ports while Iran maintains the closure of the Strait of Hormuz. The Middle East conflict continues to escalate, once again raising global energy supply uncertainty. Although Iran has lifted its petrochemical export ban, the Strait of Hormuz remains a critical channel for roughly one-fifth of all seaborne crude—meaning any shipping disruption would re-elevate global energy costs, forcing markets to reassess inflation risk over the coming months rather than merely tracking short-term oil price volatility.

Market focus tonight centers on US June CPI and Fed Chair Kevin Warsh's Congressional testimony. Consensus expects headline CPI to cool, aided by lower June energy prices—but the true driver of policy direction remains core inflation. If services prices in healthcare, insurance, and financials continue to rise strongly, it would signal that US inflation pressure is shifting from energy-driven to structural services-driven—meaning even a decline in headline CPI would not be enough to alter the Fed's stance on maintaining high rates.

Notably, markets have now fully priced in one rate hike in September, with cumulative pricing pointing to two hikes by March next year. Fed Governor Waller has explicitly stated that if core inflation exceeds expectations again, the FOMC will have to consider further tightening in the near term. What tonight's markets are really trading, then, is not a single CPI print—it is whether the Fed gets enough justification to further reinforce "higher for longer," or even accelerate the tightening path.

Meanwhile, AI remains the core direction of global capex. Meta has announced an additional $40 billion in data center investment, South Korea's government has raised future tax revenue estimates on the back of the AI chip boom, and TSMC's June revenue rose 68% year-over-year to a fresh all-time high—clear signs that global AI infrastructure continues to expand rapidly. Even as aggregate demand faces high-rate pressure, AI-linked companies continue to attract capital, and the tech sector fundamentals show no visible sign of cooling.

Looking ahead, tonight's CPI is not only about verifying whether June inflation cooled—it is about confirming whether the market's read on the future structure of inflation is correct. If core inflation retains stickiness while the Middle East continues pushing energy risk higher, the Fed will have all the more reason to maintain a tight stance—with Treasury yields and the dollar likely to remain elevated, and risk assets continuing to absorb the pressure of higher funding costs. Bitcoin failed to hold the $63,000 resistance zone yesterday, and near-term markets need to watch for a potential retest of the $60,000 round figure. Tonight's CPI print and Fed commentary will be the key catalysts shaping short-term directional volatility.