Welcome back! While Americans get set for a long weekend, the White House continues to work on trade deals before the 90-day tariff pause expires next week. 

Casey has an update on that front while Ben addresses the latest crypto ETF milestone. Here goes: 

Will he or won’t he?

Most trade deals are apparently still in limbo, but the 90-day pause on the majority of President Trump’s “Liberation Day” tariffs is expiring soon. July 9, to be exact. 

Here’s what we know about where we stand and how tariffs continue to impact markets and monetary policy. 

In a Fox News interview recorded Friday and released Sunday, Trump said that while he doesn't intend on extending the pause, he “could.” 

Bloomberg and Reuters, both citing sources familiar, reported this morning that the European Union is willing to accept a trade agreement with the US (pending a few adjustments). The European Commission has agreed to a 10% tariff on several industries but asked for lower levies on a few sectors: pharmaceuticals, alcohol, semiconductors and commercial aircrafts, per Bloomberg. 

A Canada-US deal is looking more promising after the former said it would abandon a proposed digital services tax (Trump last week called that a “direct and blatant attack” on the US). White House economic adviser Kevin Hassett told Fox yesterday that trade talks would resume “immediately.” Reuters reported that the US and Canada plan to have a deal penned by July 21. 

China and the US entered a separate agreement in June to pause certain levies until Aug. 9, so next week’s deadline does not apply to Chinese imports. 

While much of Washington is busy at the negotiating table, Fed Chair Jerome Powell spent Tuesday morning speaking at the European Central Bank forum in Portugal. The ECB’s Christine Lagarde said she’s very satisfied that the region’s inflation has reached its 2% target. 

“I’m not saying mission accomplished, but I am saying target reached,” she said — adding that though there’s increased uncertainty ahead, the central bank is well equipped for the “tormented waters.” 

If Powell, who spoke on a panel with Lagarde, is jealous of the EU hitting 2% inflation, he didn’t show it. 

The US economy is “healthy overall,” Powell said. “If you ignore the tariffs for a second, inflation is behaving pretty much exactly as we had expected and hoped that it would.” 

Speaking of tariffs, the moderator got a chance to ask what we’ve all been wondering: What would the Fed have done if there hadn’t been a “Liberation Day?” 

Powell’s response was a bit guarded (did you expect anything different?), but was still fairly interesting. His full response (lightly edited for clarity) is below: 

Moderator: Would the Fed have cut more by now if it weren't for the tariffs?

Powell: I think that's right. In effect, we went on hold when we saw the size of the tariffs. Essentially all inflation forecasts for the United States went up materially as a consequence of the tariffs. So we didn't overreact. In fact, we didn't react at all. We're simply taking some time. 

Trump has continued to ask Powell to cut rates and now, in the final months of his term, Powell is biting back. 

Keep an eye on your inbox for tariff deals and inflation rate updates in the coming days. 

— Casey Wagner

The number of consecutive trading days that US spot bitcoin ETFs have tallied net inflows. 

Capital flowing into those products over that span (June 9 to June 30) amounts to $4.7 billion, Farside Investors data shows.

It’s the longest streak since November/December — a few weeks after Trump’s election victory.

Just hours into the new month, we have another crypto ETF milestone.

To jog your memory, NYSE Arca filed a 19b-4 proposal with the SEC last year to allow Grayscale Investments’ Digital Large Cap Fund (GDLC) to trade on its exchange as an ETF.

The SEC’s deadline to rule on that proposal was tomorrow. The agency decided to give us a decision a day early.

GDLC launched as a private placement in 2018 and began publicly trading on OTC Markets the following year; it has roughly $775 million of assets under management. While 91% of the fund’s assets are allocated to bitcoin and ether, it also holds XRP, solana (SOL) and cardano (ADA). 

US spot crypto ETFs have been limited to holding the two largest crypto assets, with bitcoin and ether ETFs launching in January 2024 and July 2024, respectively. Products holding a combination of BTC and ETH — issued by Hashdex and Franklin Templeton — hit the market in February.    

Bloomberg Intelligence analysts James Seyffart and Eric Balchunas wrote in a note last month that they expected the SEC to greenlight the conversions of GDLC — as well as the Bitwise 10 Crypto Index Fund (BITW) — to ETFs by the July 2 deadline.

BITW, which holds 10 crypto assets, also has a heavy combined weighting (nearly 90%) to BTC and ETH. And let’s not forget Hashdex’s Nasdaq Crypto Index US ETF (NCIQ), which seeks to add more assets beyond bitcoin and ether. 

“Having only small allocations to alternative coins might help their conversion bids even if the SEC hasn’t individually approved each asset for an ETF,” the analysts explained. 

Nate Geraci, president of The ETF Store, shared a similar view earlier this week in an X post.

It does not appear the SEC has made a ruling yet on whether Bitwise’s crypto index fund can convert.  

Despite the 19b-4 approval, the SEC still needs to OK Grayscale’s GDLC registration statement before it can become an ETF. So the launch date is unknown for now. 

The securities regulator is also weighing planned single-asset products that would hold SOL, XRP, ADA, litecoin (LTC), dogecoin (DOGE), polkadot (DOT) and others. The SEC has until October to rule on a number of those. 

The fun never stops.

— Ben Strack