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Inflation remained persistent in July, with core inflation (excluding food and energy) rising 0.3% month-over-month, the highest in six months, and 3.1% year-over-year, up from 2.9% in June, per the Bureau of Labor Statistics. Headline CPI held steady at a 2.7% annual increase, below the expected 2.8%, with a 0.2% monthly rise driven by lower gasoline and softer food prices. Specific categories like footwear (up 1.4%), furniture, and airline fares saw notable increases, hinting at tariff-related cost pass-through as the US effective tariff rate hits 18.6%, the highest since 1933. Despite sticky inflation, experts like Seema Shah from Principal Asset Management believe the data won't deter the Federal Reserve from a potential rate cut in September, with investors now estimating a 90% chance of a 0.25% cut. However, future inflationary pressures from tariffs could complicate later rate decisions. Markets reacted positively, with stocks rising and the 10-year Treasury yield below 4.3%, reflecting optimism for monetary easing. The report underscores ongoing trade policy impacts and raises questions about the Fed's balancing act between inflation control and economic growth.
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Circle Internet Group (NYSE: CRCL), the company behind the USDC stablecoin, unveiled Arc, a new layer-1 blockchain focused on stablecoin applications, on August 12, 2025. Arc, compatible with the Ethereum Virtual Machine, uses USDC as its native gas token and aims to support enterprise-grade stablecoin payments and capital markets solutions. A public testnet is slated for this fall, with full integration into Circle’s platform and interoperability with numerous partner blockchains. Alongside this launch, Circle reported impressive Q2 2025 earnings, with a 53% year-over-year revenue increase to $658 million and a 52% rise in adjusted EBITDA to $126 million. However, a net loss of $482 million was recorded due to non-cash charges tied to its recent IPO. Following its public debut on the NYSE in June 2025, Circle’s stock surged 6.5% in pre-market trading to $172.01. CEO Jeremy Allaire highlighted the company’s sustained growth and adoption across diverse use cases. With a market cap of $65 billion, Circle holds a significant 24% share of the stablecoin market since its founding in 2013.
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Do Kwon, the South Korean cryptocurrency entrepreneur behind Terraform Labs, is set to plead guilty to charges of conspiracy to defraud and wire fraud in a U.S. court. Kwon, who developed the TerraUSD stablecoin and Luna token, is accused of misleading investors by falsely claiming a computer algorithm stabilized TerraUSD’s value in 2021, when he allegedly orchestrated secret purchases to prop up its price. This deception contributed to the $40 billion collapse of both currencies in 2022, impacting retail and institutional investors. Initially pleading not guilty to a nine-count indictment, Kwon now faces sentencing following his plea. In 2024, he settled with the SEC for $4.55 billion, including an $80 million fine and a crypto transaction ban. Detained since his extradition from Montenegro, Kwon is among several crypto figures charged amid the 2022 digital token market crash.
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The upcoming July Consumer Price Index (CPI) report, set for release on Tuesday, is anticipated to reflect a slight acceleration in annual inflation to 2.8% from June’s 2.7%, while monthly price growth slows to 0.2% from 0.3%. Core CPI, excluding food and energy, is expected to rise to 3.0% year-over-year, with a notable 0.3% monthly increase, driven by persistent goods inflation. Tariff-related cost pressures, evident in June with rising apparel, footwear, and furniture prices, are starting to impact consumers, though growing consumer fatigue may temper further hikes. Economists predict inflation will stabilize around 3% by year-end. Amidst these developments and ongoing trade tensions, with U.S. tariffs at their highest since 1933, markets are increasingly expecting a Federal Reserve rate cut in September, fueled by labor market concerns and stubborn inflation. The report will be critical for gauging the broader economic impact of tariffs and the Fed’s next moves.
