1/ Another FOMC meeting in the books.
- Fed hikes by 75bps as the market had fully priced in beforehand (#BTC higher on buy the news)
- Rate cuts expected in 2024
Here's how the markets reacted and how they are positioning for July onward ๐งต
- Fed hikes by 75bps as the market had fully priced in beforehand (#BTC higher on buy the news)
- Rate cuts expected in 2024
Here's how the markets reacted and how they are positioning for July onward ๐งต
2/ This hike was the single largest since 1994 - a clear sign that the Fed are becoming increasingly about recent inflation and employment market data that has continued to be strong.
Good/strong data is bearish risk, given that it shows no incentive for neutrality/dovishness.
Good/strong data is bearish risk, given that it shows no incentive for neutrality/dovishness.
3/ The Fed signalled that there could be more 75bps hikes to come this year and the market has reacted so far pricing in a 77.7% probability of this occurring at the FOMC meeting on July 27th
4/ Recent data was cited as a concern and Powell noted that recent hikes had failed to slow inflation and had actually allowed it to continue accelerating (which is a cop out I think, hikes take longer than a few months to show real effects)
5/ Currently the market sees September's meeting produce a 50bps hike, but there is data in between now and then that will have a significant influence on how these probabilities shift.
Inflation and employment market data in July will be key to how these probabilites evolve.
Inflation and employment market data in July will be key to how these probabilites evolve.
6/ Beats of expectations/data continuing to trend strongly will force expectations to be priced in more aggressively.
Data showing a peak/coming in below expectations will see the market ease off of it's current pricing and that would enable a bounce in risk assets like #Bitcoin
Data showing a peak/coming in below expectations will see the market ease off of it's current pricing and that would enable a bounce in risk assets like #Bitcoin
7/ The tightening of policy today was also presented with a downgrade in the Fed's outlook for economic growth - unemployment rising to 3.7% by year-end and continuing its rise to 4.1% in 2024.
8/ 2024 the next big year for crypto - pending regulatory headwinds.
The Fed's updated projection material showed policymakers expect to begin cutting rates in 2024 - which aligns with the next #Bitcoin halvening! Between now & then, the picture is bleak until data deteriorates
The Fed's updated projection material showed policymakers expect to begin cutting rates in 2024 - which aligns with the next #Bitcoin halvening! Between now & then, the picture is bleak until data deteriorates
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