Bitcoin and Ether overthrow because the Fed tries to shrink the balance sheet by $ 95 billion per month

Bitcoin and Ether overthrow because the Fed tries to shrink the balance sheet by $ 95 billion per month

Jerome Powell, Chairman, Federal Reserve
  • Fed officials plan to withdraw economic support faster than expected
  • cryptocurrencies fell in the news, while shares were traded sideways
Planning

officials of the Federal Reserve to reduce the trillions of dollars on bonds of the central bank by about $ 95 billion per month, as the minutes of the meeting in March shows.

The central bankers also plan to let some of their government supported, which would help to shorten the Fed's balance sheet, which currently amounts to $ 9 trillion. A limit of $ 60 billion in government bonds and $ 35 billion in mortgage-proof securities is likely to work, civil servants were "in general". Note.

The Fed voted in March to raise interest rates for a quarter percent point, and civil servants found that the pace of interest increases could increase in the near future.

The Fed President of St. Louis, James Bullard, was the only civil servant to vote against the measure and "do it to raise the target volume for the Federal Funds Rate by 0.5 percentage points to ¾ percent," the minutes.

"The Fed can literally and, in a figurative sense, not afford to save the economy from the upcoming recession," said David Tawil, President of the crypto hedge fund company Prochain Capital. "The interest must increase, otherwise we have a decade of stagflation."

The minutes in which the central bank begins to tighten monetary policy, with inflation increasing in the fastest pace in four decades. Russia's invasion of Ukraine has also brought additional economic challenges, according to the protocol. The raw material prices have been raised, which "impairs the global risk mood and exacerbates delivery bottlenecks," says the protocol.

cryptocurrencies fell largely in the news, with Bitcoin and Ether lost about 4 % and 7 %. The shares were trading sideways, with the S&P 500 almost 1 % and the Dow Jones lost 0.5 %. The technology -based Nasdaq was traded almost 1 % higher.

"We had a bad day before the announcement and it got worse," said Tawil. "Today crypto is acted like the share of a technology company."

However, others are less sure that the current political course of the Fed Krypto will push down.

"I don't think the story supports the view that the reduction in the Fed balance is inevitably bad for crypto," said Jack Farley, macroanalyst and moderator of the Forward Guidance Podcast. "The last (and only) case of a quantitative tightening by the FED began in October 2017, and Bitcoin rose from then on 340 % to its climax in December 2017."


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The contribution "Bitcoin and Ether falls, while the Fed wants to shrink the balance by $ 95 billion per month" is not financial advice.

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