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Here’s what you’ll find in today’s edition:

• Trump’s tariff reversal may have provided temporary relief, but the storm isn’t over yet. 

• Inflation cooled in March, but stocks don’t care. 

• The SEC’s latest approval. And a new proposal on the agency’s desk.

The Trump put was struck, but at what cost?

We got the Trump put. The president finally caved after the yield on the 30-year bond hit 5%. As is the theme for this year, the bond market is driving everything and equity markets are simply along for the ride. 

The bond market started to fall apart late Tuesday evening, and I admittedly got very worried about financial stability. In a two-hour span, the 30-year rose 21bps and hit 5%. 

In the early hours of Wednesday morning (for those on the east coast), the wonkish parts of the monetary plumbing system also began to show signs of strain. For the first time this year outside of period-end dates — typically when we see funding strains — we started to see stress and fracturing. 

A simple way to look at this is the SOFR/IORB spread. For the first time since QT began (and outside of period-end window dressing moments), the spread turned positive. I’ll avoid going into too much detail here, but the point is this: The important parts of the bond/funding market started to show strain:

As I saw these developments unfold, it turns out I wasn’t the only one glued to the bond market — President Trump and Treasury Secretary Scott Bessent were too. 

By Wednesday mid-day, the Trump administration relented and announced a 90-day pause on reciprocal tariffs on all countries except for China, which was slapped with additional fees. 

This was a welcome reprieve and quickly led to one of the largest single-day rallies of all time:

Now, however, the market has to digest where things stand. 

Anna Wong, chief US economist at Bloomberg, crunched the numbers to see where the impact on the economy nets out. It turns out the aggregate tariff impact on the economy as a whole is mostly the same; the risk just got transferred to China:

At time of writing, US equities have given back half of the gains from yesterday’s huge rally. 

What’s difficult about ascertaining what comes next? None of the economic data we’re receiving is all that useful. 

For example, this morning we saw that March marked the first negative month-over-month print on CPI inflation since 2020, and yet, bonds sold off. Something that would typically be very positive for bond markets sent the market in the opposite direction. 

Simply put, there are bigger forces at play right now. The fact that bonds couldn’t rally off an ice-cold CPI print tells you there’s some big issues in bond markets. Although Trump’s pivot resulted in a short-term bounce, the fundamental issues remain.

— Felix Jauvin

Nothing Changes Without Builders

The Fed won’t onboard the next billion users. Rates won’t fix UX. Monetary policy won’t push your code to prod.

The thing that moves crypto forward? Builders.

Permissionless IV.

Not an event. A checkpoint. For the ones writing the next cycle into existence.

💻 Hack for $100K+ in bounties.

🆓 Devs get in free.

📅 June 22–26 | Brooklyn, NY

The number of senators who voted Wednesday night to confirm Paul Atkins as leader of the SEC.

That vote comes just ahead of tomorrow’s SEC roundtable focused on tailoring regulation for crypto trading. 

The agency made a number of crypto-friendly moves after Gary Gensler’s January departure, and could continue that momentum with Atkins now at the helm.  

In some unexpected good news, inflation last month cooled to a five-month low. But tariffs remain a headwind moving forward. 

The headline CPI for March rose 2.4% annually. That was lower than projected (2.6%) and down from February, which showed a 2.8% increase. On a monthly basis, prices actually fell 0.1%. 

Core CPI (all goods, minus food and energy) increased 2.8% year over year last month — also down from February, when the core print came in at 3.1%. 

As Felix mentioned, US equities early in the session were steady, still riding yesterday’s euphoria following Trump’s tariff pause announcement. But renewed trade war fears quickly overshadowed any inflation optimism. 

While the White House may have paused its more aggressive tariffs for the next three months, the blanket 10% levy remains in place. That is except for Chinese imports, which now face fees of 145%. 

While 10% may be significantly less than most of the policies announced last week on “Liberation Day,” the levy still is expected to significantly impact prices. Plus, many sector-specific tariffs, like those on auto parts and cars, remain in place. 

There’s also no telling what will happen in 90 days with these “paused” policies. Let’s be honest, there’s no telling what will happen in the next 90 minutes.

— Casey Wagner

The SEC yesterday approved options on spot ether ETFs by BlackRock, Fidelity and others. 21Shares also became the latest asset manager to float a dogecoin ETF.

The upshot is that 2025 indeed appears to be a year we could see a lot more crypto products come to market. The level of demand for them will be another story. 

When the SEC approved options on bitcoin ETFs in October, industry watchers highlighted how it would enhance liquidity and price discovery around that ecosystem.

Essentially, institutional investors can better manage their exposures under various market conditions via ETF options, they said. Speculators, too, can use them to leverage their bets should they be particularly bullish or bearish on the underlying asset.

The ETF Store president Nate Geraci said (like after the approval of bitcoin ETF options) we can expect to see a bunch of new ether-related launches from issuers. 

“Covered call strategy eth ETFs, buffer eth ETFs, etc.,” he noted in an X post.

We’ve seen bitcoin-focused funds using options to offer downside protection. And you might recall that, just last week, Grayscale filed for options-based “covered call” and “premium income” bitcoin ETFs.

As for the 21Shares Dogecoin ETF proposed yesterday, that filing came alongside news that the Dogecoin Foundation would endorse the product. Bloomberg Intelligence analysts previously put the chance of DOGE ETF approval (by the end of 2025) at 75%.

Federico Brokate, head of 21Shares’ US business, said this planned product was designed for retail investors and institutional investors seeking “high-conviction, non-correlated exposures.”

Dogecoin’s one-minute block times and ultra-low fees make it ideal for everyday payments and microtransactions, he argued. Then there’s the “community engagement and social capital” piece. 

Brokate added: “Unlike bitcoin’s narrative-driven scarcity model, dogecoin offers functional utility — an increasingly important trait as digital assets move from speculation to application.”

— Ben Strack

• As alluded to earlier, Paul Atkins is headed back to the SEC after a 16-year hiatus. Trump is expected to designate him as chair once he’s sworn in. 

• House Republican leaders yesterday canceled a scheduled vote on the budget resolution the Senate passed over the weekend after it became clear there were enough GOP holdouts for the measure to fail. A two-week recess is scheduled to start tomorrow, but Speaker Mike Johnson said lawmakers may return to Washington early to work on the legislation. 

• The US government operated in a deficit of $161 billion in March — an improvement from February when outlays outpaced receipts by $307 billion. Spending last month came in at $528 billion, compared to a record $603 billion in February.