By Brett Munster
Stealing the Jackson Hole Spotlight
While the world’s financial elite convened in Jackson Hole from August 21–23 for the Federal Reserve’s annual retreat—the crypto industry was tuned in to what happened just up the mountain a few days earlier. The second annual Wyoming Blockchain Symposium, held just an hour from the Fed gathering, deliberately overlapped with the Fed’s marquee event—drawing in policymakers who perhaps thought, “Why not kill two birds with one Jackson Hole visit?”
Unlike last year’s more insular crypto gathering, this year’s Symposium featured major appearances from top brass: SEC Chair Paul Atkins, Fed Vice Chair for Supervision Michelle Bowman, Fed Governor Christopher Waller, and even representation of the DOJ in the form of Acting Assistant Attorney General Matthew J. Galeotti. The presence of all three—the SEC, the Fed, and the DOJ—at a crypto conference was unprecedented, signaling that the crypto industry is no longer viewed with suspicion from the sidelines but rather as part of mainstream financial infrastructure.
SEC Chair Paul Atkins used his fireside chat to unveil Project Crypto, an initiative aimed at shifting away from litigation-first tactics toward clearer, innovation-friendly frameworks. He made a watershed statement: “There are very few tokens that are securities,” emphasizing that the true test is how a token is packaged, promoted, and sold—not the token itself. Atkins doubled down on this tone by promising tailored exemptions, safe harbors, and streamlined rules—clearly an effort to make the U.S. the most attractive home for digital-asset projects.
Federal Reserve Vice Chair for Supervision Michelle Bowman delivered what the Financial Times described as a “seismic shift” in perspective—arguing that blockchain could fundamentally reshape how we think about money and the financial system itself. As a sitting governor on the Federal Reserve Board and the official responsible for bank regulation and supervision, Bowman’s words carried particular weight. This wasn’t a peripheral voice from the finance world; this was one of the Fed’s most influential policymakers signaling that digital assets deserve serious consideration within the core of U.S. financial oversight.
In her remarks, Bowman highlighted the transformative potential of tokenization, pointing to its ability to deliver faster, safer, and more cost-efficient asset transfers. She urged regulators to work with, rather than against, crypto innovations, arguing that a “more modern, efficient and effective financial system furthers key regulatory objectives.” By enabling instant settlement and offering a transparent record of ownership, Bowman noted, blockchain technologies could help reduce systemic risk across the banking and financial sectors. She praised ongoing tokenization pilots by banks and international bodies, predicting a “tipping point” once legal and regulatory frameworks catch up. Importantly, Bowman cautioned that if the financial system evolves entirely outside of traditional banks, regulation becomes far more difficult making it essential, in her view, for banks and regulators to proactively adopt crypto technologies rather than risk being left behind.
On the second day of the Symposium, Federal Reserve Governor Christopher Waller took the stage. Considered one of the leading contenders to succeed Jerome Powell as Fed Chair next May, Waller already wields considerable influence within the central bank, particularly on payment policy—making his views on digital assets especially noteworthy.
Waller argued that decentralized finance, smart contracts, stablecoins, and blockchain technology are simply the latest chapters in the long history of financial innovation—and that there’s “nothing to be afraid of.” He stressed that the Fed must modernize its own payment infrastructure to remain compatible with crypto, framing digital assets not as a disruption to be resisted but as tools to be integrated. His delivery was relaxed enough to include a tongue-in-cheek reference to trading meme coins on a decentralized exchange, a remark that underscored just how normalized crypto culture has become in 2025.
Then acting Assistant Attorney General Matthew J. Galeotti delivered a message that resonated deeply with developers: “Writing code without ill intent is not a crime.” Coming on the heels of the DOJ’s April 2025 Blanche Memo, this statement signals a clear shift away from enforcement‑first regulation toward a more innovation‑friendly approach. For years, U.S. crypto and open-source developers have operated under a cloud of uncertainty; Galeotti’s remarks make it emphatically clear that shipping code is not a crime. This represents a major milestone for the U.S. crypto ecosystem, removing a longstanding legal shadow and opening the door for more robust domestic development.
These speeches weren’t just optics. We have highly placed individuals from the SEC, the Fed, and the DOJ, in one room, speaking not about crypto as a threat—but as a tool, a vehicle for modernization, and something to be embraced with clarity. That marks a huge pivot from even a year ago, when crypto was on the defensive. Today, it’s part of the dialogue. Real regulatory reform isn’t somewhere over the horizon—it’s already on the podium, speaking directly to industry players and investors. When even central bankers are joking about meme-coin trades, you know the industry has come a long way.
The 6% hurdle rate
The most misunderstood number in any portfolio isn’t return, risk, or even volatility—it’s the hurdle rate: the minimum growth your money must achieve each year just to preserve its purchasing power. If your capital grows at 4% while inflation erodes 6% of its value, you’re not building wealth—you’re falling behind. Yet the benchmark most investors, economists, and policymakers rely on—the Consumer Price Index (CPI)—is structured in a way that consistently understates the actual decline in purchasing power, misleading investors about the level of growth required to preserve and grow their current wealth.
The problem lies in what CPI is designed to measure. CPI tracks the cost of a representative basket of goods and services, adjusting over time to reflect changes in consumer behavior. This means CPI reveals more about consumer adaptation than actual purchasing power—a subtle distinction with major implications for investors. For example, if beef prices rise and households shift to chicken, the index lowers the weight of beef and increases the weight of chicken. While this reflects spending patterns, it masks the fact that consumers can no longer afford the same basket they once could—a genuine loss of purchasing power. CPI also incorporates “hedonic adjustments,” reducing measured inflation when product quality improves (for instance, a faster laptop for the same price), even if consumers would prefer the option to pay less for last year’s model. These adjustments make CPI a useful policy tool for tracking cost-of-living trends, but they systematically understate the inflation that matters to investors: the erosion of wealth needed to maintain a consistent standard of consumption.
These methodological choices are deliberate. CPI is intended as an economic indicator, and its calculation often aligns with policy incentives. Politically, reported inflation is one of the most visible economic statistics, and when food, rent, or gas feel unaffordable, voters hold leaders accountable. A lower CPI helps sustain the narrative that inflation is “under control,” when everyday experience suggests otherwise. Financially, the incentives are even stronger. Social Security, military pensions, federal retirement plans, and many other government benefits are indexed to CPI. With tens of millions of Americans receiving these payments, even a modest understatement of inflation translates into billions in savings on cost-of-living adjustments. And because lower CPI figures also slow the upward pressure on interest costs for the nation’s $37 trillion debt load, policymakers have every incentive to prefer a subdued number.
Beyond incentives, methodology makes CPI a flawed guide for investors. The Bureau of Labor Statistics (BLS), which calculates CPI, operates behind closed doors: the raw data is not public, the reports can’t be audited, and over the decades, the methodology has been revised more than 20 times. These adjustments, while defensible academically, generally lower reported inflation. Food is a prime example. Beef prices have climbed more than 45% in recent years, yet beef now carries a smaller weight in the CPI basket because households purchase less of it. Not able to purchase as much of an item as you once were able to is the definition of loss of purchasing power. And while CPI adjusts to consumer behavior by design, reflecting what people actually buy, that adaptability weakens the signal investors need most. But for investors seeking to preserve purchasing power, that adaptability dilutes the very signal they need most. It’s telling that if CPI were still calculated under its 1980s methodology, today’s inflation would likely appear closer to 8–10%. The problem isn’t that CPI fails at its intended purpose—it’s simply the wrong benchmark for investors.
The limitations extend further. Because it is typically reported as a 12-month rolling figure, sudden price shocks are blended together with data from as long as a year ago. This smoothing delayed recognition of the sharp inflation surge in 2021–2022: while households felt prices jumping at the grocery store and gas pump, official numbers lagged behind. Likewise, when inflation began cooling in late 2022, averages masked the decline for months. For investors making allocation decisions in real time, this backward-looking design makes CPI a sluggish and sometimes misleading signal.
Finally, there are growing concerns about data quality. Budget and staffing cuts at the BLS have reduced the scope and frequency of price surveys, with some regions seeing data collection suspended altogether. To fill the gaps, the BLS increasingly relies on imputation—statistical estimates, essentially educated guesswork—to substitute for missing prices. While standard practice in economics, imputation has risen from about 10% of CPI inputs in past decades to as much as one-third in some categories today. That makes CPI feel more like a model output than a direct measure of prices on the ground. For investors who need a clear, forward-looking hurdle rate, relying on such a blurred measure creates obvious risks.
And yet, despite all these limitations, CPI remains the default yardstick for inflation in the financial world—and by extension, the benchmark investors use for their hurdle rate. The disconnect is obvious: everyday experience at the grocery store, gas pump, or housing market often diverges sharply from official CPI numbers. Investors trying to preserve wealth in real terms risk underestimating the true challenge inflation poses if they rely solely on CPI.
A more informative benchmark for investors is the growth of the money supply, most commonly represented by the measure known as M2. While CPI measures price changes in a shifting, behavior-driven basket of goods and services, M2 tracks the total stock of money circulating in the economy, including cash, checking deposits, savings accounts, and certain money market funds. Unlike CPI, M2 is relatively transparent and straightforward to understand, unaffected by methodological adjustments and substitution effects. It is not a perfect metric. As a forward-looking indicator, it is not perfectly correlated with current inflation, and supply shocks, changes in demand, fiscal policy, and productivity can also influence prices independently. Even so, M2 provides insight into one of the root causes of inflation—the expansion of money itself—while CPI primarily reflects its symptoms in consumer prices.
Historically, trends in M2 have foreshadowed longer-term inflationary shifts, though admittedly the relationship is neither immediate nor precise. Periods of rapid money supply growth, such as the quantitative easing following the 2008 financial crisis, illustrate this: M2 expanded quickly, yet CPI inflation remained muted for years due to low money velocity, global supply dynamics, and Fed balance sheet management. This lag underscores that M2 is a forward-looking signal of inflationary pressure rather than a precise short-term predictor of consumer prices. Monitoring M2 provides investors with an early indication of purchasing power erosion that CPI alone often obscures.
The long-term data underscores the gap. From 2000 to 2025, global M2 denominated in dollars expanded at an average annual rate of about 6.3%. Over the same period, CPI inflation averaged only 2.6%. That difference represents a silent but significant erosion of purchasing power. Since COVID, CPI has reported a 22% increase in consumer prices, yet M2 growth points closer to 43%. For many households, lived experience—whether at the grocery store, in housing, or in the car market—feels far closer to the higher figure.
The implications for investors are profound. If the true hurdle rate is closer to 6% than the 2–3% implied by CPI, much of traditional portfolio construction looks dangerously outdated. Most fixed-income assets, yielding below that threshold, virtually guarantee negative real returns. Even equities, which returned roughly 7.3% annually from 2000 to 2025, delivered barely 1% in real terms once adjusted for monetary expansion—less still after accounting for taxes. Residential real estate, with average annual gains of just 4.4% according to the Case-Shiller Index and median sales prices of US homes, lagged even further. Measured against money supply growth, the past 25 years—despite one of the strongest stock market runs in history—delivered surprisingly little in terms of true wealth preservation let alone real growth.
Acknowledging a 6% hurdle rate reshapes the investing landscape. Bonds lose their role as safe havens, equities appear less compelling, and real estate looks more vulnerable than protective. Hard assets—particularly gold and bitcoin—stand apart because they are insulated from monetary expansion. Gold has held its purchasing power for millennia, while bitcoin has demonstrated a unique correlation with global liquidity and has outpaced every major asset class over the past decade, precisely because its supply is fixed by design.
Continuing to rely on CPI is like navigating with a broken compass: it systematically understates purchasing power erosion, encourages complacency, and aligns with the interests of policymakers who benefit from lower reported inflation. M2 is not flawless, but it provides a far clearer measure of monetary debasement—the true driver of long-term inflation. For investors, recalibrating the hurdle rate around money supply growth is essential. In a world where real wealth preservation requires a closer-to-6% return, portfolios must prioritize assets that can keep pace with the relentless expansion of money. Moving beyond CPI is not optional; it is critical to safeguarding wealth against silent but persistent erosion.
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Disclaimer: This is not investment advice. The content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. Nothing contained constitutes a solicitation, recommendation, endorsement, or offer to buy or sell any securities or other financial instruments in this or in any other jurisdiction in which such solicitation or offer would be unlawful under the securities laws of such jurisdiction. All Content is information of a general nature and does not address the circumstances of any particular individual or entity. Opinions expressed are solely my own and do not express the views or opinions of Blockforce Capital.
Disclaimer: This is not investment advice. The content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. Nothing contained constitutes a solicitation, recommendation, endorsement, or offer to buy or sell any securities or other financial instruments in this or in any other jurisdiction in which such solicitation or offer would be unlawful under the securities laws of such jurisdiction. All Content is information of a general nature and does not address the circumstances of any particular individual or entity. Opinions expressed are solely my own and do not express the views or opinions of Blockforce Capital or Onramp Invest.
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