Crypto Canary
August 25, 2025
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–In his final Jackson Hole speech Powell sent a strong signal that an ease will occur in Sept. From the speech, “…the balance of risks appears to be shifting.” “…the baseline outlook and the shifting balance of risks may warrant adjusting our policy stance.” “…allow us to proceed carefully as we consider changes.”
–Rate futures surged, with the red SOFR pack (2nd year forward) settling +11.0. However, no contract settled above 9700 or 3%. The peak contract, SFRH7 settled exactly at 9700, which was up 10 on the week. The ten year yield fell 7 to 4.258%. Shorter maturity yields fell hardest, with twos down 9.6 bps to 3.692% (down just 6.5 on the week). While Powell’s comments indicate easing, the backdrop – with rates not all that far from neutral, and inflation concerns still bubbling – suggest a soft cap on forward SOFR contracts.
–Before the speech there was a buyer of 60k TYV 113.5c for 18 covered from 112-04 to 03, 23d. These calls settled 17 vs 112-055. The trade adds to similar size buys of TYV 113 calls, which are now max call open interest at 227k. TYV 113.5c have 103.5k open.
–Crypto, we have a problem. Though equities surged at week’s end, with DJIA at a new record high, bitcoin is down this morning. testing 111k, lowest in two months. Down around 11% from the mid-month high. 200 DMA is 101k, which looks like a near term target.
–New Home Sales today expected 630k, +0.5% m/m. From a Redfin summary (July):
“On average, the number of homes sold was down 2.1% year over year and there were 473,987 homes sold in July this year, down 484,141 homes sold in July last year.”
