alphabloQ (Techstars '22)’s Post

Our latest theme is that the U.S. Central Bank, called the Federal Reserve, or the Fed for short, is NOT politically independent, but is in fact a highly partisan organization that leans left. The above items are not some conspiracy theory. The Fed’s own actions support this view. So we’ve got both real estate and stocks bubbling up again, courtesy of the Fed playing political games. In the near-term this is fantastic for Americans, who will see their net worth rise as a result of this. The bad news is that there’s no such thing as a free lunch. And the Fed’s political shenanigans are unleashing a second wave of inflation. Gold has figured it out. It recently exploded to new all-time highs https://lnkd.in/gkwbEfjf

Hey Fed, What Changed from Two Months Ago? Answer...the election. This whole Fed administration has been a rotund joke. It sure seems like they've been under the Yellen political spell for the last four years. Where is Volcker when you need him? Will a replacement please stand up? This Fed cannot walk and chew gum. They do not understand that inflation and growth were supposed to be equal objectives ...not a soft landing. Obviously, they cannot handle both. Transitory inflation together with modern monetary theory were doomed strategies from the very beginning. The right approach should have been to introduce deflation immediately, through higher rates and sale of the bond holdings. Instead, they added fuel to the fire by keeping rates at close to zero through the monster deficit creation acts. To those that made money shorting treasuries, congratulations. It was the easiest trade since the last financial crisis. I get it, markets adapt to financial conditions, but it is unacceptable that the fed is not held accountable for their cumulative 20% inflation they helped create. We are all poorer as a result. Who will hold them accountable? Who will stand up? Ironically, the failures of the fed, encourage crypto. Maybe crypto is a broader market forward view than that of a few people in a room analyzing yesterday's info. At this point, it doesn't look like crypto is a hedge. It looks more like it will replace the incompetent world central bank's currencies! And these guys are watching it happen... https://lnkd.in/ezM-t9CX

⚡ The February PCE report is due on Friday, March 29, with a mild increase expected. The core index guides the #Fed's decisions on potential rate cuts, now projected between June and September. 🔽 The Cleveland Fed expects +0.30% MoM and +2.78% YoY for the core component, the regulator's preferred inflation gauge. Another vital indicator — the core CPI — exceeded forecasts in February (+0.4% vs. +0.3% MoM and +3.8% vs. +3.7% YoY). Hotter-than-expected data fueled significant market volatility a few weeks ago. 💼 The FOMC March 20 meeting kept the interest rate unchanged at 5.25%–5.5%, which helped the #crypto market rebound. With Chair Jerome Powell confirming the Fed's intention to cut rates this year, investors anticipate risk assets' rise on monetary easing. On March 29, Powell will also speak at a San Francisco Fed conference titled "Macroeconomics and Monetary Policy," providing more clues on the policy outlook. While inflation is still beyond the 2% target, the likelihood of a rate cut in June is now 65%, against 4% for May, according to CME FedWatch. 💡 More #earnbitmacro insights next week! To learn more about the impact of Fed policies on Bitcoin, check out our fresh comprehensive guide: https://lnkd.in/eC3kD5j8 #cryptonews #cryptotrading #cex

No rate cuts now, but what's on the horizon for the Federal Reserve? The central bank's next policy meeting is just around the corner on April 30-May 1, 2024. While many expect rates to remain steady, the Fed faces potential risks from high-interest rates. Futures markets suggest that there's a better than 50/50 chance that the FOMC will reverse course late in 2024 and begin cutting rates as soon as the summer. Check out this interesting article... https://lnkd.in/dgaxKqAK

The Fed is between a rock and a hard place. Its policy options are running out as more catalysts for a regional banking crisis, more wicked than the one we saw in March last year, emerge. Troubled conmercial propety portfolios, rising consumer loan defaults, razor-thin interest margins, and inflation-pressured operating costs are all coming together in one perfect storm. A financial accident can force the Fed to digress from fighting inflation into averting a banking contagion. The sooner America beats inflation decisively and loosens its monetary policy to allow the regional banks breathing room, the better it can avoid a painful landing. Unfortunately, the albatross on Jerome Powell's back is the loose purse strings of a heavy-spending and heavy-borrowing administration.https://https://lnkd.in/gm2zx2Qh

The Federal Reserve on Wednesday kept its key interest rate unchanged and signaled that just one cut is expected before the end of the year, reported CNBC. "With markets hoping for a more accommodative central bank, Federal Open Market Committee policymakers following their two-day meeting took two rate reductions off the table from the three indicated in March. The committee also signaled that it believes the long-run interest rate is higher than previously indicated." "New forecasts released after this week’s two-day meeting indicated slight optimism that inflation remains on track to head back to the Fed’s 2% goal, allowing for some policy loosening later this year." https://lnkd.in/djw2cYPY #unitedstates #interestrates #economy

The inflation we see is consistent with the Federal Reserves annualized growth rate in their base assets. I have tracked the FOMC and monetary policy for decades as an interest rate arb, this was mandatory understanding. Anyway the FOMC asset growth is a consistent 3% annualized for the last 25 years. This is our real inflation rate, they know it and I know it. I further know that cutting Fed Funds will destroy inflation and drag down the equilibrium of all rates, which will destroy the banks NIM, it will alleviate the banks Unrealized losses as well, but this interest rate deflation will compress global economies and lead to most of the capital creation from the last 4 years to be hoarded starving the system of risk capital. This narrative of inflation is a main stream narrative of today's thinking, investors need to look at 2 to 5 yrs down and what we will have. The markets reflect past pricing, not future pricing and that is a concept for a whole different time and audience, which is more of what I cover on my site. For now all this 70s style inflation up tick is ill founded, today's global economy is not like the 70s, far more interconnected and diverse...

https://lnkd.in/epBvRxc6 3 points: 1. Is there room for a 50 bps cut from the Fed this year? For sure! In fact, depending on how conditions evolve, there may even be room for two! However, we do not think one needs to happen in September. 2. In short, we are not in panic mode. Measured cuts seem appropriate, and our base case is for the Fed Funds Rate to be between 3.0%-3.25% by the end of 2025, so 3 cuts this year from the Fed is still a reasonable outcome. 3. In terms of currencies, it is still too early to short the dollar but the time is coming. The direction of currencies, and essentially the USD, will depend not just on the magnitude of rate cuts, but also on other factors like geopolitical risk and the strength of the US economy. The dollar has multiple supports to potentially offset any rate cuts.