Rate-Hike Odds Double-Digit in Days — Crypto Takes the Hint ⏱️

Major cryptocurrencies fell more than 2% over 24 hours as money markets sharply raised the odds of a Federal Reserve interest-rate increase as soon as July, putting traders on edge ahead of June's consumer-price index report and congressional testimony from Fed Chair Kevin Warsh. Bitcoin (BTC) dropped to $62,380, with Ether (ETH), XRP and other major tokens posting similar losses, according to CoinDesk data.

The repricing moved quickly. According to Bloomberg data, money markets now assign roughly a 50% probability to a Fed rate hike this month, up from about 10% just days ago. The shift followed remarks from Fed Governor Christopher Waller that officials may need to raise rates to bring price pressures under control. The two-year U.S. Treasury yield climbed to 4.29%, its highest level since early last year, reflecting renewed hawkish positioning at the front end of the curve.

A fresh round of geopolitical pressure added fuel. President Donald Trump reinstated a U.S. blockade of Iranian vessels transiting the Strait of Hormuz and demanded a 20% reimbursement fee on all other cargo passing through the waterway. West Texas Intermediate crude futures surged to nearly $80 a barrel from $67 at the start of the month, lifting energy costs and inflation expectations.

Investors are now focused on the Labor Department's June consumer-price index release Tuesday at 8:30 a.m. ET. Economists surveyed by Bloomberg forecast headline CPI falling below a 4% annual rate, with the report expected to show the first declines in both headline and core inflation since January, after May's readings of 4.2% and 2.9%, respectively. Even if the figures match expectations, analysts said they risk being viewed as backward-looking following the recent oil price move.

Attention will then shift to Mr. Warsh's testimony on Capitol Hill. Analysts at ING wrote that he could "if he chooses, emphasize the tameness of inflation expectations," noting Mr. Warsh "has enough