We got a 75 basis point raise from the Fed. The mantra is still they are going to do what it takes to stop inflation, lincluding killing the economy.
In this video I discuss what this all could mean for cryptocurrency and how things might unfold over the next year.
Remember this is not financial advice.
▶️ 3Speak
I still think they won't do anything TOO crazy because of the upcoming elections, but this will only prolong the pain up until the real problems show up. This will be a hell end of a year.
I'm predicting a continued bear market for 12-18 months... which, y'know, is filled with opportunity in itself.
We did start back in Nove so we are roughly 10 months into the downturn.
So I guess it all depends upon when you want to start it.
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True... I was thinking 12-18 months from now.
Essentially the Fed would need to stop raising rates, do something with its massive balance sheet, and consumer spending will need to start going up before we get out of this downturn.
The raising of interest rates, or stopping of it, will come rather quickly in my opinion. I think the Fed will keep getting more bad news.
As for the balance sheet, that doesnt really matter at the end of the day. The Fed is now having to carry the weight of the global economy since the Eurodollar system is broken.
They will only keep adding.
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Well, bring on Q2/Q3 then. Could use a bull run ;)
It's about time for a recession to hit. The Fed managed to avoid it after the lockdowns started but I think it's just a matter of time. I don't think many people are happy with the economy in the US.
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FED is raising and EZB is still sleeping in the cabin while the Euro has already reached 0.98$. I think this recession on a global scale is underestimated. We might see the Euro Zone fall flat on their faces and turn the whole scenario into a depression.
The EU is in a lot of trouble.
I felt that area was due a recession even if the global economy didnt dip into one (and before Ukraine).
Now it is a certainty.
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Gas prices for heating peaked around 10x this year while fuel and electricity are getting too expensive compared to incomes. The government in Berlin has decided that buildings (including living spaces) shall not be heated above 19° Celsius this winter, civil unrest will occur. Layoffs are starting to fill the news and a remarkable slowdown in export trade quantity is apparent. The Euro was at 1.08$-1.22$ two years ago and is in a straight line downwards since May 21 now. All of that while we see accelerating inflation. I see prices go up, income stays the same, and jobs and companies are reducing capacity. Makes me wonder how that's not a depression.
The problem is that with FED raising the rate aggressively to tame inflation, what will happen from here now the rest of the world will follow suite, and even if their economy does not call for a rate hike they will just switch to the hiking cycle, which actually not going to help.
The Fed is raising interest rates to tame something it didnt cause. Even Powell admitted it isnt going to get more oil out of the ground or chips to automakers.
It will crush demand, i.e. the economy. And yes others might follow suit only to blow out their economy.
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Summary:
In this video, Task discusses the recent actions taken by the Federal Reserve, particularly the 75 basis point raise in the Interbank Lending Rate. He delves into how the Fed's focus on controlling inflation might lead to potential economic downturns and job losses in an attempt to combat rising prices. The discussion then shifts towards the impact of these actions on the cryptocurrency market, emphasizing how market sentiments influence the movement of crypto prices. Task provides insights on the potential timelines for the economy, bonds, equities, and crypto to rebound, highlighting the interconnectedness between various economic indicators and their influence on cryptocurrency trends.
Detailed Article:
Task commences the video by highlighting the recent decision by the Federal Reserve to increase the Interbank Lending Rate by 75 basis points, signaling a proactive approach to addressing inflation concerns. He delves into the potential consequences of such actions, predicting economic hardships and job losses as a result of the measures taken by the Fed to curb inflationary pressures. Task articulates the Federal Reserve's strategy, which seems to prioritize stabilizing prices over immediate economic stability, creating a sense of uncertainty regarding the future economic landscape.
Moving on to the impact on the cryptocurrency market, Task explains the concept of crypto as a risk-on, risk-off trade, where market sentiments dictate the movement of crypto prices. He emphasizes that during risk-off sentiments, investors seek safety in traditional assets rather than cryptocurrencies, which leads to sell-offs in the crypto market. Task draws a parallel between market sentiments, economic indicators, and the behavior of different asset classes, shedding light on the intricate relationship between risk appetite and investment choices.
Furthermore, Task delves into the forecasted economic timelines proposed by various experts such as Raoul Pal and Elon Musk, indicating potential recession durations and their implications on markets. He predicts a possible turnaround for cryptocurrency markets in 2023, citing historical patterns of market movements preceding economic shifts. Task provides valuable insights into the dynamics of market cycles, underlining the significance of monitoring indicators like bond performance, equity movements, and the Dollar Index (DXY) to anticipate crypto market trends.
In conclusion, Task emphasizes the importance of maintaining a vigilant approach in the current economic climate, acknowledging the uncertainty and potential challenges that lie ahead. By offering a comprehensive analysis of economic indicators, market sentiments, and their impacts on the cryptocurrency landscape, Task provides viewers with valuable insights and considerations for navigating the evolving financial markets.
Notice: This is an AI-generated summary based on a transcript of the video. The summarization of the videos in this channel was requested/approved by the channel owner.