Sensei's Morning Forecast: Powell’s Fed Seat Wobbles as Crypto Meets Wall Street

Powell’s possible resignation shakes markets, JPMorgan embraces crypto loans, BoE rethinks digital pound, UK borrowing soars, Joby races to 2026 launch, and Satoshi identity remains a mystery

🧠 One Big Thing

$2.5 billion. That’s the cost of the Fed’s headquarters renovation—a figure now central to rumors of Jerome Powell’s potential removal, with markets bracing for what a contested Fed leadership could mean for interest rates and global liquidity.

💰 Money Move of the Day

Uncertainty at the Fed is a reminder that even the most stable institutions can face unexpected shocks. Rather than trying to predict every twist, consider how you’d weather volatility—whether through building a cash buffer, reducing high-interest debt, or diversifying your income streams.

📊 Market Snapshot

Cryptocurrencies:
Bitcoin (BTC): $118,792 (▲ +1.16%)
Ethereum (ETH): $3,686 (▼ -2.05%)
XRP: $3.49 (▼ -1.60%)

Equity Indices (Futures):
S&P 500 (SPX): 6,303 (▼ -0.13%)
NASDAQ 100: 23,288 (▼ -0.23%)
FTSE 100: 9,018 (▲ +0.34%)

Commodities & Bonds:
10-Year US Treasury Yield: 4.392% (▲ +0.27%)
Oil (WTI): $66.66 (▼ -0.47%)
Gold: $3,388 (▼ -0.27%)

🕒 Data as of UK (BST): 11:45 / US (EST): 06:45 / Asia (Tokyo): 19:45

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✅ 5 Things to Know Today

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Powell’s Seat on Shaky Ground: Speech Looms as Exit Rumors Swirl

Federal Reserve Chair Jerome Powell will address a Washington policy forum at 8:30 a.m. ET today amid mounting speculation that he could resign—or be removed—before his second term ends in May 2026. Reports from (Mitrade) and other outlets suggest Federal Housing Finance Agency Director Bill Pulte claimed Powell has “agreed to step down,” while Treasury Secretary Scott Bessent confirmed a formal search for successors is “already starting.” Although the White House insists no decision is imminent, President Trump recently told lawmakers he considered firing Powell “for cause” over a ballooning $2.5 billion renovation of the Fed’s headquarters, calling the project “fraud” unless proven otherwise (Fox Business) (Reuters) (Reuters).

Markets are already on edge. Ten-year Treasury yields rose to 4.389% early this morning as investors priced in the risk of institutional upheaval. The dollar swung wildly on Tuesday when a leaked “firing letter” temporarily spurred EUR/USD to jump 1.3%, before retracing as Trump clarified that Powell’s removal was “highly unlikely” absent clear evidence of wrongdoing (CNBC). Interest-rate futures now imply just 15 basis points of Fed easing by September, but options markets are pricing wider tail risks—ranging from deeper cuts to a prolonged hold—depending on whether a potential interim chair could take a looser stance (Investing.com) (Reuters).

Sensei’s Insight: Central-bank independence underpins global asset valuations, and any legally contested ouster could freeze monetary policy and drive a rush into safe havens. Powell’s remarks today are pivotal—not just for the Fed’s July 30 meeting but for the broader market narrative heading into Q3 earnings and tariff-driven inflation data.

JPMorgan Eyes Crypto-Backed Loans in Strategic Shift

JPMorgan Chase is reportedly preparing to offer loans directly secured by clients’ cryptocurrency holdings, including Bitcoin and Ethereum, potentially launching the program as early as 2026. The $4.3 trillion banking giant, long known for its cautious stance on digital assets, is considering this move to provide liquidity without requiring investors to sell their crypto assets (Reuters; Coindesk). Unlike the bank’s current practice of accepting crypto exchange-traded funds (ETFs) as collateral, this program would involve direct lending against actual holdings, with third-party custodians managing the crypto since JPMorgan does not hold digital assets on its own balance sheet (Proactive Investors; FXStreet).

This development highlights a significant evolution for CEO Jamie Dimon, who once labeled Bitcoin a “fraud” in 2017 but has recently softened his stance, allowing clients to invest in crypto while defending their right to do so despite his personal skepticism (CNBC; NY Post). The timing coincides with a friendlier regulatory environment under the Trump administration and the recent passage of stablecoin legislation, prompting traditional financial institutions to explore deeper involvement in digital assets (Investing.com). If implemented, this initiative could give JPMorgan a competitive edge over rivals like Goldman Sachs while signaling broader mainstream acceptance of cryptocurrencies as viable collateral.

Sensei’s Insight: Crypto’s leap into traditional lending is no longer theoretical—when the largest U.S. bank embraces Bitcoin as collateral, the bridge between Wall Street and digital assets is complete.

BoE Weighs Shelving Digital Pound as Global CBDC Momentum Stalls

The Bank of England (BoE) is reportedly considering shelving its plans for a retail digital pound amid increasing skepticism toward central bank digital currencies (CBDCs) and the rapid rise of alternative payment solutions (Bloomberg). The central bank has urged UK banks to prioritize tokenized deposits and other private-sector payment innovations rather than pursuing a state-issued CBDC (crypto.news; AAStocks). This marks a notable shift from its earlier stance when officials suggested a digital pound was “likely to be needed” in the future (BBC). The project remains in its design phase, which is expected to run through 2025-2026, with no final decision yet made (Digital Pound Foundation).

Governor Andrew Bailey has been increasingly vocal about his doubts, stating in June that he is “unconvinced that we need to create new forms of money” (AJ Bell). Instead, Bailey has called for banks to focus on tokenizing existing deposits, which he views as a more practical bridge between traditional and digital finance (Ainvest). Internal BoE research reportedly shows that the potential benefits of a CBDC have waned as senior officials have stepped back from oversight roles (CCN). Globally, momentum behind CBDCs is slowing—South Korea has suspended digital currency pilots, and the U.S. halted development under the Trump administration (AAStocks).

Sensei’s Insight: The BoE’s pivot highlights the growing dominance of private-sector solutions like stablecoins and tokenized deposits. If major central banks continue to deprioritize CBDCs, fintech innovation—not state-backed digital currencies—may define the future of payments and banking.

UK Borrows £6.6 Billion More Than Expected in June

UK government borrowing in June rose to £20.7 billion, exceeding forecasts by £3.5 billion and standing £6.6 billion higher than a year ago, according to the Office for National Statistics (Borsa Italiana) (Independent). This marks the second-highest June borrowing since records began in 1993, surpassed only by the pandemic-hit June 2020 (Sky News). Chancellor Rachel Reeves faces mounting pressure as debt interest payments surged to £16.4 billion—the second-highest June interest expense since records started in 1997 (Yahoo Finance).

The jump in borrowing is largely due to soaring debt servicing costs tied to inflation-indexed bonds, with Retail Price Index-linked payments up £8.4 billion compared to June 2024 (Yahoo Finance). Total public sector spending increased by £12.7 billion, while receipts rose only £6.1 billion despite a £3.1 billion boost from higher employer National Insurance contributions introduced in April (Trading Economics). Year-to-date borrowing has reached £57.8 billion, £7.5 billion higher than the same period last year and the third-highest April-June total on record (ONS). Public sector net debt now stands at 96.3% of GDP, a level last seen in the early 1960s.

Sensei’s Insight: Reeves’ fiscal headroom has shrunk to just £9.9 billion following the October Budget, with economists at Capital Economics warning that she may need to raise £15–25 billion in the autumn, with tax hikes carrying the brunt (Capital Economics). Rising debt costs and tighter fiscal constraints are likely to weigh on business confidence and market perceptions of the UK’s fiscal stability.

Joby Aviation Readies for 2026 Launch With Five Aircraft in Final Certification Phase

Joby Aviation Inc. is accelerating toward its planned commercial passenger service in early 2026, with five electric vertical takeoff and landing (eVTOL) aircraft expected to enter one of the final phases of Federal Aviation Administration (FAA) certification next year (Joby Aviation; Seeking Alpha). CEO JoeBen Bevirt stated that only one certified aircraft is required to launch air tours, while two are sufficient for scheduled airport routes, positioning Joby to meet its aggressive timeline (EV Powered). The company has entered the Type Inspection Authorization (TIA) phase—the fifth and final stage of FAA certification—with FAA test pilots completing three days of human factors testing on FAA-conforming hardware at Joby’s Marina, California facility (Charged EVs; Composites World). This marks the first time an eVTOL manufacturer has achieved this stage, solidifying Joby’s regulatory lead over competitors (Joby Aviation).

Joby is pursuing a three-pronged commercialization strategy encompassing direct aircraft sales, company-operated aircraft, and joint ventures (Joby Aviation; Canvas Business Model). Its Marina facility has expanded to 435,000 square feet, increasing annual production capacity to 24 aircraft by 2026—double its previous target (EplaneAI). A second plant planned for Dayton, Ohio will have the capacity for 500 units annually, supporting scale-up amid projected eVTOL market growth from $2.1 billion in 2024 to $30.2 billion by 2033 (LinkedIn; Precedence Research). Joby’s exclusive six-year operating agreement in Dubai, coupled with successful June 2025 test flights, offers a near-term international revenue stream while U.S. certification progresses (TLI Magazine). This strategy reduces execution risk for investors tracking a market with a potential $1 trillion valuation by 2040 (TipRanks; Business Insider).

Sensei’s Insight: Joby’s regulatory lead and Dubai-first approach are powerful hedges against FAA delays, making it a frontrunner in the race for early eVTOL commercialization.

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