This newsletter is sponsored by PHEMEX, the world's best crypto exchange for both spot and leverage. Sign up with the link above and get some free Bitcoin - up to $3600 worth. PHEMEX is also celebrating their two year anniversary by sharing 2 BTC with 10 lucky winners to help them realize their dreams: https://anniversary.phemex.com/#dream-sectionMarkets have continued to rise for years on seemingly endless Fed stimulus. Now the market is reacting favorably to the Fed's proposed inflation countermeasures.Go figure.Yesterday’s Fed meeting indicated that the agency intends to tackle inflation in earnest, stepping up the pace even after Powell’s recent speech retiring the “T-word” (transitory). The Fed is forecasting three interest rate hikes in 2022, after projecting just one in September's meeting. They are also speeding up their reduction in bond purchases by a few months. So what does the jargon mean?The Fed is admitting that inflation is out of control, spurred by their own monetary policy. Ironically, they will have to manipulate the market less to control it by slowing their "economy saving" policies of printing and buying.The Fed has always been a manipulative monetary force, but their involvement leveled up dramatically when Covid struck. Now they are cutting back, but not by choice. Inflation has forced their hand.When the Fed first began lowering interest rates and buying bonds at a rapid pace, it was a desperate attempt to maintain investor confidence and prevent the sky from falling. Some would argue that they had no choice, because the flip side was depression and deflation, the force that they truly fear.Their policy worked - really well for the rich. Stocks and other assets went through the roof, followed predictably by inflation. Jerome Powell is now making it incredibly clear that he is ready to slow the Fed’s measures and bring us back on track. In his words, “the economy no longer needs increasing amounts of policy support.” Since we seemingly live in the upside down, the market reacted favorably to the Fed’s decision to cut back on stimulus. This reminds us of a famous saying - "markets hate uncertainty." The inevitable raise in rates and slowing of Fed buying was likely priced in. Sometimes certainty, even if it's not the news that the market wants, is better than uncertainty.Powell concluded his press conference by answering a question on whether he was concerned by cryptocurrency or the sector as a whole.“The concerns are not so much current financial stability concerns, I of course support the views expressed by the President’s Working Group report on stablecoins. Stablecoins can certainly be a useful, efficient consumer-serving part of the financial system if they’re properly regulated and right now, they aren’t. They have the potential to scale, particularly if they were to be associated with one of the very large tech networks that exist.” He added, “in terms of the more cryptocurrencies, the speculative assets, I don't see them as a financial stability concern at the moment, I do think they are risky and not backed by anything.”Could be worse, honestly.Up, down or sideways, the Fed will continue to manipulate markets with every tool available. For now, the market seems to be reacting favorably to the certainty of the current plan. That could change by the next meeting, so enjoy this time of relative calm.In This Issue:Markets Hate UncertaintySome Facts About Trading NFTs, Part 2 - IntoTheBlockBitcoin Thoughts And AnalysisAltcoin ChartsChart RequestsJack And Jay Make Progress On Bitcoin TrustFirst Doge NFTSotheby's Made 100M On NFTs This YearThe Wolf Of All Streets Podcast Ft. Hester PeirceMy Recommended Platforms And ToolsIF YOU HAVE ANY ISSUE WITH THE NEWSLETTER OR YOUR SUBSCRIPTION, PLEASE CONTACT: PREMIUMSUPPORT@GETREVUE.CO
The Wolf Den #393 - Markets Hate Uncertainty
The Wolf Den #393 - Markets Hate Uncertainty
The Wolf Den #393 - Markets Hate Uncertainty
This newsletter is sponsored by PHEMEX, the world's best crypto exchange for both spot and leverage. Sign up with the link above and get some free Bitcoin - up to $3600 worth. PHEMEX is also celebrating their two year anniversary by sharing 2 BTC with 10 lucky winners to help them realize their dreams: https://anniversary.phemex.com/#dream-sectionMarkets have continued to rise for years on seemingly endless Fed stimulus. Now the market is reacting favorably to the Fed's proposed inflation countermeasures.Go figure.Yesterday’s Fed meeting indicated that the agency intends to tackle inflation in earnest, stepping up the pace even after Powell’s recent speech retiring the “T-word” (transitory). The Fed is forecasting three interest rate hikes in 2022, after projecting just one in September's meeting. They are also speeding up their reduction in bond purchases by a few months. So what does the jargon mean?The Fed is admitting that inflation is out of control, spurred by their own monetary policy. Ironically, they will have to manipulate the market less to control it by slowing their "economy saving" policies of printing and buying.The Fed has always been a manipulative monetary force, but their involvement leveled up dramatically when Covid struck. Now they are cutting back, but not by choice. Inflation has forced their hand.When the Fed first began lowering interest rates and buying bonds at a rapid pace, it was a desperate attempt to maintain investor confidence and prevent the sky from falling. Some would argue that they had no choice, because the flip side was depression and deflation, the force that they truly fear.Their policy worked - really well for the rich. Stocks and other assets went through the roof, followed predictably by inflation. Jerome Powell is now making it incredibly clear that he is ready to slow the Fed’s measures and bring us back on track. In his words, “the economy no longer needs increasing amounts of policy support.” Since we seemingly live in the upside down, the market reacted favorably to the Fed’s decision to cut back on stimulus. This reminds us of a famous saying - "markets hate uncertainty." The inevitable raise in rates and slowing of Fed buying was likely priced in. Sometimes certainty, even if it's not the news that the market wants, is better than uncertainty.Powell concluded his press conference by answering a question on whether he was concerned by cryptocurrency or the sector as a whole.“The concerns are not so much current financial stability concerns, I of course support the views expressed by the President’s Working Group report on stablecoins. Stablecoins can certainly be a useful, efficient consumer-serving part of the financial system if they’re properly regulated and right now, they aren’t. They have the potential to scale, particularly if they were to be associated with one of the very large tech networks that exist.” He added, “in terms of the more cryptocurrencies, the speculative assets, I don't see them as a financial stability concern at the moment, I do think they are risky and not backed by anything.”Could be worse, honestly.Up, down or sideways, the Fed will continue to manipulate markets with every tool available. For now, the market seems to be reacting favorably to the certainty of the current plan. That could change by the next meeting, so enjoy this time of relative calm.In This Issue:Markets Hate UncertaintySome Facts About Trading NFTs, Part 2 - IntoTheBlockBitcoin Thoughts And AnalysisAltcoin ChartsChart RequestsJack And Jay Make Progress On Bitcoin TrustFirst Doge NFTSotheby's Made 100M On NFTs This YearThe Wolf Of All Streets Podcast Ft. Hester PeirceMy Recommended Platforms And ToolsIF YOU HAVE ANY ISSUE WITH THE NEWSLETTER OR YOUR SUBSCRIPTION, PLEASE CONTACT: PREMIUMSUPPORT@GETREVUE.CO