Our framework set two conditions for the Fed to reprice risk: acceptance above 5% on the 10-year, or guidance that reads as the opening of a sequence rather than a single adjustment.
The second fired clearly. The Fed raised 25bp to 3.75–4.00%, its first increase since 2023, unanimously; and 16 of 18 participants projected at least one more hike this year, four of them two. Warsh said inflation has been too high for too long and that the committee's standard has not been satisfied. That is a sequence, not an adjustment.
The first did not. The 10-year touched 5% on Tuesday and has backed away since. A print is not acceptance.
Risk rallied anyway: equities up over 1%, gold up more than 2%, crude down roughly 3% toward $99.
That outcome is the framework, not an exception to it. Tightening reaches equity valuations through the long end of the curve, not through the policy rate.
The Fed delivered the hawkish message and the long end declined to carry it; helped by oil backing away from the geopolitical spike that had been feeding the inflation premium.
Hawkish guidance without bond-market transmission does not reprice risk.
That is also the fragility. The rally rests on two things the Fed does not control: where crude goes next, and whether the long end keeps rejecting 5%. Either one turning restores the pressure immediately, and the dot plot has already told us the policy path.
$BTC near 76,700, 27% retraced on the grid we published. 74,136 held; the low this week came within striking distance and never reached it. The level stands, 3% below spot.
The structure is unchanged in both directions. 83–87k remains untested above. Below, 74,136 stays the line, and losing it puts 67–69k in view. The failure of the Clarity Act in the Senate on a 49–50 vote removes the legislative catalyst for 2026 and leaves the sector dependent on agency rulemaking; a headwind that sits outside anything the Fed does.
Positioning
Cash remains the dominant allocation. We hold small long exposure across a handful of majors and one open short.
Disclosure: we hold positions in assets discussed above. The framework was published before the positions and is unchanged by them.
Open positions and full trade history since inception: app.binance.com/uni-qr/cpro/CapitalFlowTech
Levels and invalidations, not calls. Not financial advice.