Fed chief Jerome Powell said Tuesday that recent data shows &quot;a lack of further progress so far this year on returning to our 2% inflation goal.&quot; He signaled that rates will stay high until inflation gets closer to 2%. As recently as early April, Powell had maintained that there was continued ...

Dow Jones Futures Rise After Stocks Shrug Off Powell; Super Micro Flashes Buy Signal | Investor's Business Daily

Federal Reserve Chair Jerome Powell testifies before a Senate Banking, Housing, and Urban Affairs Committee hearing on Capitol Hill in Washington, U.S., March 7, 2024. REUTERS/Tom Brenner/File Photo Purchase Licensing Rights, opens new tab

Morning Bid: Blunt Powell signals rate cut plans on ice | Reuters

In economic news, Federal Reserve Chairman Jerome Powell will participate in a moderated discussion Tuesday afternoon with Tiff Macklem, Governor of the Bank of Canada. The talk will be held at the Washington, D.C. Forum on the Canadian economy and is scheduled to start at 1:15 p.m. ET.

Stock Market Today: Dow Jones Rises Ahead Of Powell Comments; Tesla Stock Extends Dive | Investor's Business Daily

Stocks tumbled this week as investors continued to digest hotter-than-expected inflation data and the central bank&#x27;s latest guidance on rate cuts. In public remarks on Tuesday, Federal Reserve Chair Powell said the inflation fight appears to have stalled, and central bankers needed more confidence ...

Stock market today: Indexes rise as traders try to shrug off Powell's hawkish commentary

Powell on Tuesday signaled the Fed will wait longer than previously anticipated to cut borrowing costs following a series of surprisingly high inflation readings — marking a notable shift from his December pivot toward easing. Treasury yields reached fresh year-to-date highs and the dollar ...

Powell’s US Rates Warning Means Headaches for Rest of the World - Bloomberg

US Federal Reserve chair Jerome Powell damped expectations of impending interest rate cuts on Tuesday — a sign that the Fed may have pumped so much money into the economy during the pandemic that the surplus is still making its way through the country.

The Fed may have pumped so much money into the economy that it's now taking way longer to cut rates

Why it matters The Fed may keep rates at the current, two-decades high level for longer as it assesses incoming economic data, Powell said in his first public remarks since last week&#x27;s hotter-than-expected inflation report.

Jerome Powell: Interest rates may stay high as inflation progress stalls

The Dow Jones Industrial Average (^DJI) finished the day up 0.2%, or more than 50 points, following comments from Federal Reserve chair Jerome Powell, who said it will likely take &quot;longer than expected&quot; for the central bank to be confident in its inflation fight.

Stock market today: Dow snaps 6-day losing streak, Powell warns on inflation

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Powell Suggests Interest Rates Could Stay High for a Longer Period

Powell’s remarks represented a shift in his message after a third straight month in which a key measure of inflation exceeded forecasts. He also signaled the US central bank will likely keep rates on hold for longer than originally planned, according to Jeffrey Roach at LPL Financial.

US Yields Spike as Hawkish Powell Puts 5% in Play: Markets Wrap

POWELY

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The U.S. Federal Reserve maintained interest rates between 5.25% and 5.5% yesterday, aligning with the widespread market predictions. During his , Fed Chair, Jerome Powell, also managed to reduce market expectations of any rate cuts to happen in March. Markets now estimate the probability of rate cuts to be communicated at the Fed’s meeting in March at just 35.5%, down from 48% just a week ago. speech All Eyes on Inflation In the Q&A session that followed the press release, Jerome Powell substantiated the need to gain 'greater confidence' that inflation continues to trend downwards toward the desired 2% before any rate cuts can be entertained. It’s obvious that the Fed is in a really difficult spot here. Apart from battling inflation, the evidence that the economic system is in distress is clear—especially in the banking sector. The prospects of that changing under the current rate environment are low. Noteworthy, the New York Community Bank, the bank that acquired the now-defunct Signature Bank, just saw its stock more than 40%. tumble Bitcoin Spot ETFs Net Inflows Turning Positive Although Grayscale continues to experience outflows, the rate of outflow is diminishing as the days pass, and the net inflow into the other vehicles has been picking up. Over the last three days, the total net inflows have consistently ranged between $200 million and $250 million. I anticipate this influx of capital into to be persistent, which has the potential to push the price of BTC higher despite the policy uncertainty. BTC Whales are Accumulating - Are you? It is also worth observing that while BTC's price seems to have entered a consolidation range, whales have been aggressively accumulating. Data from IntoTheBlock that Bitcoin whales increased their holdings by over $3 billion in January alone. reveals This happens at a time when the general sentiment has fallen into neutral territory and at a time when miners have been actively reducing their . BTC inventory With those factors in mind, it is difficult to stay entirely bearish on the outlook for BTC even though the uncertainty around economic policy remains a threat to a continued rally. Bitcoin Ordinals - Not a Passing Fad In the past year, Bitcoin ordinals have emerged as one of the leading NFT trends. Despite initial skepticism from some enthusiasts claiming their lack of utility, the count of ordinals on the Bitcoin blockchain has to over 56 million, a remarkable increase from less than 1 million a year ago. surged Even more intriguing is the remarkable value some ordinal collections have achieved. In December, the BitcoinShrooms collection, among the earliest ordinal projects, fetched an astonishing USD$450,850, setting a record at Sotheby's Auction. At this pace, Bitcoin's blockchain has the potential to evolve into a foundational element for various crypto facets. While this could increase on-chain fees, it might also signify the emergence of a new ecosystem thriving on the Bitcoin blockchain, beyond BTC itself. Noteworthy Mentions BTC Price prediction model I toyed around with a price prediction model for BTC simulating what an inflow of $100B would mean to price using the depth of the order book. Here is the if you wanna explore the model. link Industry Shakers FTX Expects to Repay Customers in Full FTX has committed to reimbursing investors following the cryptocurrency exchange's collapse, resulting in substantial financial losses. In a court hearing, FTX's attorney, Andrew Dietderich, expressed confidence that the company will possess adequate funds to satisfy all valid customer and creditor claims entirely. The reimbursement to customers will be determined by the cryptocurrency's price as of November 2022, the period when the exchange filed for bankruptcy. Harvest Global Files for the First Bitcoin Spot ETF in Hong Kong Harvest Global has applied to a Bitcoin exchange-traded fund (ETF) spot with the Hong Kong Securities and Futures Commission (SFC). If granted approval, this ETF would enable investors to engage in share trading on a conventional stock exchange, directly correlated with Bitcoin's price. Hong Kong is actively establishing itself as a crypto-friendly jurisdiction, and this initiative may draw in new participants to the market. Celsius Emerges from Chapter 11, Initiates $3B Crypto Distribution Celsius Network LLC has successfully emerged from bankruptcy, concluding an eighteen-month process with the completion of transactions under its approved plan of reorganization. The plan, supported by approximately 98% of account holders and confirmed by the Bankruptcy Court for the Southern District of New York on November 9, 2023, involves the distribution of over $3 billion in cryptocurrency and fiat to Celsius' creditors. Enjoyed these insights? There's more where that came from. Follow me on for daily tidbits and updates. Twitter/X Also published . here

Fed Holds Rates, Powell Signals Caution, Bitcoin ETFs Gain Traction

Dedicated to Powell's Books

Jesse Powell is Building a Culture of Crypto Values at Kraken

Miniature Mail is a service that allows you to send tiny letters to friends and family. It has received over 1000 upvotes on Product Hunt . Davis Baer : What’s your background, and what are you working on? : I am a self-taught programmer who’s dabbled in a lot of different languages and markets over the years. I’ve done web development, Android apps, hybrid apps, and more. My current day job is building project management software for power utility companies. I started on the side, and somehow find time to fulfill orders and make enhancements to it around my full-time schedule. Justin Powell Miniature Mail What motivated you to get started with Miniature Mail? My wife was recovering from a recent surgery and wasn’t having a great day, so I decided to handcraft a little letter to cheer her up. I’d had the idea floating around in my head for a while, and it seemed like a great opportunity to try making one. She loved it so much that I decided to make a business out of it and see who else was interested in sending tiny letters. What went into building the initial product? Since I am a programmer, I spent a lot of time setting up my website and creating a live preview module so that customers could see what their letters will look like. I also spent a lot of time developing a command-line tool to help me generate print files and manage orders. It was very important to me that the live preview on my website is accurately reproduced in my print files, so a pretty large percentage of my time went into making sure they render exactly the same. I also had to find a high-quality print shop with no minimum order quantity, and figure out how to mail letters that are so small. What’s your business model, and how have you grown your revenue? I offer on-demand printing, assembly, and shipping of miniature letters inside tiny envelopes for $10 each. My material cost is low, but labor cost is high (I assemble each order my hand). I’ve actually been intentionally keeping quiet to lower my order volume until I can resolve some production issues. How did you get your first 10 customers? I on a whim, and was surprised when we became the #1 product of the day. We got a lot more than 10 customers! launched on Product Hunt What are the biggest challenges you’ve faced and obstacles you’ve overcome? The biggest challenge we’re facing is delivery time & reliability. We’ve struggled with USPS mail handling protocol, which has resulted in late deliveries and in some cases lost mail. Our plastic mailing sleeves are not designed to be machine-sorted or processed, so we’re working with a manufacturer to develop a custom solution. Hopefully we can create a mailer that is machine sortable and put these delivery issues behind us. What does the future of Miniature Mail look like? We are working hard to make our current product offering better: faster delivery, more useful & delightful packaging, more design options and flexibility for writing the perfect miniature letter. We’re also planning to expand our product line to include small “Hallmark” style greeting cards, miniature parcels or boxes with gifts inside, gift cards, etc. We’re really excited to expand, but we’re tempering our enthusiasm until we’ve resolved more issues with our current product and fully served our current customers. Another goal for the future is to open a bulk and business-to-business line for larger order volumes. We hope to have a first draft functional before the end of the year. Check out and follow them on Miniature Mail Twitter This interview is brought to you by , a tool to schedule and automatically repeat your posts on Facebook, Instagram, Twitter, Pinterest, LinkedIn, and Google My Business OneUp

Founder Interviews: Justin Powell of Miniature Mail

The Father Of Skateboarding, George Powell — Doing Well By Having Fun

Last week, the US Federal Reserve lowered the rate as most analysts expected. Moreover, the rate was reduced by 0.5%, not 0.25%. This is the first time the Fed has cut rates since March 2020. This may be the U.S. regulator's response to the fear of a global recession and also a reaction to reaching 2.5% inflation figures. This event as a whole can be considered a good thing for the crypto community—after all, in the long term, a rate cut usually makes capital more available for the stock market and risky assets, including cryptocurrencies. Fed Rate Changes Summary Over 30 Years On the other hand, the fact that the rate has been cut for the first time since 2020 indicates problems in the global and U.S. economies. Before drawing any conclusions it is worth drawing analogies to the previous sharp rate cuts by the Fed in the last 30 years. The figure below shows how the Fed did it. By May 2000, the Fed Funds rate was 6.5%, and in the previous 10 years, from 1991 to 2000, it had been between 3% and 6.75%. During 2001, the regulator had dramatically cut the rate from 6.5% to 1.75%. In the following years, 2002 and 2003, the Federal Reserve further reduced the rate to 1%. Other measures were also used to stimulate the economy - obviously, it was in a pretty severe crisis at the time and needed to keep up with demand. From 2004 to 2006, the rate gradually rose to 5.25%. By the end of 2007, when the first wave of the Great Recession crisis hit, the rate dropped to 4.25%. In 2008, the Fed reduced it to 0.25% and kept it at this level until 2015. By the end of 2019, the rate had risen slightly but was only 1.75%. And was lowered again to the lowest level of 0.25% for 2 meetings in 2020. In 2022, when the crisis was partially overcome, the Fed began to raise the rate to 5.5% in May 2023. Suddenly, the trend changed dramatically this year, and the Fed came back to rate cuts again. We already have three clear cases over the last 30 years in which the Fed has started a rate cut cycle after hiking it in 2001, 2007, and 2020. Particularly sharp rate cuts come at a time when the economy is in big trouble. How Did the Stock Market React to the Rate Cuts? Thanks to the American Institute of Economic Research (AIER) and its Senior Fellow Richard M. Salsman, we have the graph, which shows a correlation between the Fed rate and the S&P 500 in the picture below. It shows that, at the beginning of the rate cut cycle, the economy and stock market continued to decline and the market recovery from a maximum of 2000 took 7 years up to 2007. Also, during the Great Recession, the S&P 500 reached a dip in March 2009 and a full stock market recovery happened only in 2013. Two more pictures below demonstrate a correlation between the stock market and the Fed rate during those years in detail. During the Coronavirus pandemic, the stock market also fell quite a lot. However, market recovery was faster than in 2001 and 2008 reinforced by unprecedented stimulus - going back to the previous high for the S&P 500 took less than 6 months from February 2020 up to August 2020.  However, during the coronavirus, the amount of liquidity injected into the economy by the Fed was at its maximum - and a second such high stimulus may not be tolerated by the economy and it may sink into stagflation. What's Next? Based on the figures and analysis above, we see that the cycle of the Fed interest rate reduction has started. This is confirmed by the positions of other global central banks. The European Central Bank, Bank of England, and Bank of Canada started a rate reduction this year. However, in order for demand support and stock market growth, it’s essential more support and liquidity injection from monetary regulators. In other words, more rate cuts in the next few years and other possible stimulus for the economy. Moreover, being a short-term positive factor for the stock market current rate cuts may play a different role in the mid-term distance (1 year) either causing panic or supporting the economy. Basically, we can present two scenarios for this purpose - negative and positive for the crypto market. Positive Scenario So far, Bitcoin and the crypto market have reacted to the Fed's decision with a slight increase. The price of BTC rose from $60,000 to $63,000.  In the last two weeks, we also had good news from Asian monetary regulators—the BoJ meeting and the People’s Bank of China (PBOC) Stimulus Program announcement. On 20 September, the BoJ decided to save 0.25% % interest rate after a small hike in July. This Tuesday, PBOC announced upcoming rate cuts and allowed local banks to decrease reserve requirement ratios (RRR) by 50 bps, which can add to the economy about 1 trillion yuan ($142 bln). Also, the PBOC has lowered rates of existing mortgages to support demand in the real estate market. The position of the Bank of Japan is very important - it lends investors on the global markets at the lowest rate. This August BOJ’s decision to hike the rate from 0.1% to 0.25% caused panic in the markets. Fortunately, the BoJ has calmed the markets this time. If US regulators continue to cut rates and other ways of injecting liquidity, for example, they will somehow reduce the reverse repo program (RRP), we are waiting for the markets to grow, but most likely, it will be after the US presidential election - in early 2025. By the way, crypto opinion makers such as Anthony Scaramucci realize this, and they predict that Bitcoin will reach $100,000 only by the end of 2024 and early 2025. So, a bullish scenario for the market is quite possible in the long term, especially if regulators will increase liquidity injections. For instance, the Fed is likely to cut rates this November. Negative Scenario Based on previous rate cut cycles in the last 30 years, all of them were caused by tightening economic conditions, while regulators have taken measures to keep demand and add up liquidity to support the economy afloat. However, in 2001 and 2008, after short-term market growth pushed by rate cuts, it continued to fall for a long time, and market recovery up to the previous maximum took years. And there is no proof that this time will be different. Probably at least 6-12 months is the essential term for the economy to change its trajectory after rate cuts. Nevertheless, critics continue to believe that the Fed is too late with the rate cut, and the U.S. economy will experience a surge in inflation. At the same time, they warn that the threat of recession remains—a rate cut may fail to prevent the markets from falling and cause panic and a sell-off of risk assets. For example, this is the opinion of Bitmex ex-CEO Arthur Hayes. Political Factor In his speech, Jerome Powell noted that if the data on employment and inflation decline in the U.S. had been known in July, the Fed could have lowered the rate already. However, many believe that the political component also played a role in the regulator's decision—although the Fed is formally independent of the U.S. Government, it certainly coordinates its policy with the U.S. Treasury and other officials. It is very important for the Democratic government to show good figures before the US presidential election. The current uncertainty in macroeconomics will probably continue this year. The stock and cryptocurrency markets are waiting for certainty in politics. It is likely to be particularly well affected by the victory of Donald Trump. Especially if the Republican candidate will implement his party's program to create a national Bitcoin reserve. In this case, the crypto market may start growing faster than the stock market, as it was a year ago after the launch of the Bitcoin ETF. However, even in the case of Kamala Harris' victory, the measures already taken by the Fed may, combined with the end of the period of political turbulence, play its role in a matter of months like it was in 2020. I would like to warn you that this publication is made for informational purposes. I’ve collected all the information available in open sources, but the situation in the world economy is complex, and it is not clear what scenario will develop - perhaps a repeat of the great recession and even stagflation of the 80s. So, be careful when making any decisions. Especially if you trade with leverage. If you are interested in getting more crypto insights, you can watch the global crypto regulation rating here and get updates on my X account. Last week, the US Federal Reserve lowered the rate as most analysts expected. Moreover, the rate was reduced by 0.5%, not 0.25%. This is the first time the Fed has cut rates since March 2020. This may be the U.S. regulator's response to the fear of a global recession and also a reaction to reaching 2.5% inflation figures. This event as a whole can be considered a good thing for the crypto community—after all, in the long term, a rate cut usually makes capital more available for the stock market and risky assets, including cryptocurrencies. Fed Rate Changes Summary Over 30 Years On the other hand, the fact that the rate has been cut for the first time since 2020 indicates problems in the global and U.S. economies. Before drawing any conclusions it is worth drawing analogies to the previous sharp rate cuts by the Fed in the last 30 years. The figure below shows how the Fed did it. By May 2000, the Fed Funds rate was 6.5%, and in the previous 10 years, from 1991 to 2000, it had been between 3% and 6.75%. During 2001, the regulator had dramatically cut the rate from 6.5% to 1.75%. In the following years, 2002 and 2003, the Federal Reserve further reduced the rate to 1%. Other measures were also used to stimulate the economy - obviously, it was in a pretty severe crisis at the time and needed to keep up with demand. From 2004 to 2006, the rate gradually rose to 5.25%. By the end of 2007, when the first wave of the Great Recession crisis hit, the rate dropped to 4.25%. In 2008, the Fed reduced it to 0.25% and kept it at this level until 2015. By the end of 2019, the rate had risen slightly but was only 1.75%. And was lowered again to the lowest level of 0.25% for 2 meetings in 2020. In 2022, when the crisis was partially overcome, the Fed began to raise the rate to 5.5% in May 2023. Suddenly, the trend changed dramatically this year, and the Fed came back to rate cuts again. We already have three clear cases over the last 30 years in which the Fed has started a rate cut cycle after hiking it in 2001, 2007, and 2020. Particularly sharp rate cuts come at a time when the economy is in big trouble. How Did the Stock Market React to the Rate Cuts? Thanks to the American Institute of Economic Research (AIER) and its Senior Fellow Richard M. Salsman, we have the graph , which shows a correlation between the Fed rate and the S&P 500 in the picture below. the graph It shows that, at the beginning of the rate cut cycle, the economy and stock market continued to decline and the market recovery from a maximum of 2000 took 7 years up to 2007. Also, during the Great Recession, the S&P 500 reached a dip in March 2009 and a full stock market recovery happened only in 2013. Two more pictures below demonstrate a correlation between the stock market and the Fed rate during those years in detail. During the Coronavirus pandemic, the stock market also fell quite a lot. However, market recovery was faster than in 2001 and 2008 reinforced by unprecedented stimulus - going back to the previous high for the S&P 500 took less than 6 months from February 2020 up to August 2020.  However, during the coronavirus, the amount of liquidity injected into the economy by the Fed was at its maximum - and a second such high stimulus may not be tolerated by the economy and it may sink into stagflation. What's Next? Based on the figures and analysis above, we see that the cycle of the Fed interest rate reduction has started. This is confirmed by the positions of other global central banks. The European Central Bank, Bank of England, and Bank of Canada started a rate reduction this year. However, in order for demand support and stock market growth, it’s essential more support and liquidity injection from monetary regulators. In other words, more rate cuts in the next few years and other possible stimulus for the economy. Moreover, being a short-term positive factor for the stock market current rate cuts may play a different role in the mid-term distance (1 year) either causing panic or supporting the economy. Basically, we can present two scenarios for this purpose - negative and positive for the crypto market. Positive Scenario So far, Bitcoin and the crypto market have reacted to the Fed's decision with a slight increase. The price of BTC rose from $60,000 to $63,000.  In the last two weeks, we also had good news from Asian monetary regulators—the BoJ meeting and the People’s Bank of China (PBOC) Stimulus Program announcement. On 20 September, the BoJ decided to save 0.25% % interest rate after a small hike in July. decided decided This Tuesday, PBOC announced upcoming rate cuts and allowed local banks to decrease reserve requirement ratios (RRR) by 50 bps, which can add to the economy about 1 trillion yuan ($142 bln). Also, the PBOC has lowered rates of existing mortgages to support demand in the real estate market. announced announced The position of the Bank of Japan is very important - it lends investors on the global markets at the lowest rate. This August BOJ’s decision to hike the rate from 0.1% to 0.25% caused panic in the markets. Fortunately, the BoJ has calmed the markets this time. If US regulators continue to cut rates and other ways of injecting liquidity, for example, they will somehow reduce the reverse repo program (RRP), we are waiting for the markets to grow, but most likely, it will be after the US presidential election - in early 2025. By the way, crypto opinion makers such as Anthony Scaramucci realize this, and they predict that Bitcoin will reach $100,000 only by the end of 2024 and early 2025. So, a bullish scenario for the market is quite possible in the long term, especially if regulators will increase liquidity injections. For instance, the Fed is likely to cut rates this November. Negative Scenario Based on previous rate cut cycles in the last 30 years, all of them were caused by tightening economic conditions, while regulators have taken measures to keep demand and add up liquidity to support the economy afloat. However, in 2001 and 2008, after short-term market growth pushed by rate cuts, it continued to fall for a long time, and market recovery up to the previous maximum took years. And there is no proof that this time will be different. Probably at least 6-12 months is the essential term for the economy to change its trajectory after rate cuts. Nevertheless, critics continue to believe that the Fed is too late with the rate cut, and the U.S. economy will experience a surge in inflation. At the same time, they warn that the threat of recession remains—a rate cut may fail to prevent the markets from falling and cause panic and a sell-off of risk assets. For example, this is the opinion of Bitmex ex-CEO Arthur Hayes. Political Factor In his speech, Jerome Powell noted that if the data on employment and inflation decline in the U.S. had been known in July, the Fed could have lowered the rate already. However, many believe that the political component also played a role in the regulator's decision—although the Fed is formally independent of the U.S. Government, it certainly coordinates its policy with the U.S. Treasury and other officials. It is very important for the Democratic government to show good figures before the US presidential election. The current uncertainty in macroeconomics will probably continue this year. The stock and cryptocurrency markets are waiting for certainty in politics. It is likely to be particularly well affected by the victory of Donald Trump. Especially if the Republican candidate will implement his party's program to create a national Bitcoin reserve. In this case, the crypto market may start growing faster than the stock market, as it was a year ago after the launch of the Bitcoin ETF. However, even in the case of Kamala Harris' victory, the measures already taken by the Fed may, combined with the end of the period of political turbulence, play its role in a matter of months like it was in 2020. I would like to warn you that this publication is made for informational purposes. I’ve collected all the information available in open sources, but the situation in the world economy is complex, and it is not clear what scenario will develop - perhaps a repeat of the great recession and even stagflation of the 80s. So, be careful when making any decisions. Especially if you trade with leverage. If you are interested in getting more crypto insights, you can watch the global crypto regulation rating here and get updates on my X account . here here X account X account

The Fed Finally Cut Rates. What's Next?

Next week will be extremely important for financial markets. On September 18, the Fed will announce its interest rate decision and start the new rate cut cycle. Markets expect that the most probable scenario is a 25 bps rate cut. It should be noted that traders do not rule out the possibility of a 50 bpd cut. From a big-picture point of view, the Fed is expected to cut rates by 75 - 100 bpd by the end of this year to provide support to the labor market, which has already started to show signs of weakness. Rate cuts improve the liquidity situation in the markets and make money cheaper, which usually serves as support for riskier assets. However, markets do not look too bullish right now. Crypto markets have settled well below highs that were seen back in March and remain under some pressure. The tech-heavy NASDAQ index has pulled back from this year’s highs by roughly 10%. Why are markets not rallying ahead of the start of the new rate-cut cycle? Markets are worried about the potential slowdown of the global economy. The situation in China’s economy is a key problem for investors. The country’s economy has not fully recovered after the coronavirus pandemic, and the government’s attempts to provide stimulus have not yielded tangible results. China’s real estate sector, which was one of the key drivers of the country’s growth, shows no signs of improvement. The recent data indicates that China’s imports increased by just 0.5% year-over-year in August. Put simply, China’s demand remains under material pressure. Meanwhile, it looks like the U.S. labor market has started to cool down, which signals that the U.S. economy may be slowing down. Worries about weak China and the potential slowdown of the American economy have impacted investors’ risk appetite. Both cryptocurrencies and tech stocks are sensitive to fluctuations in market sentiment. When investors are ready to increase their risks in search of profits, they buy cryptocurrencies and tech stocks. In the opposite scenario, which implies rising demand for safe-haven assets, crypto and tech find themselves under pressure. The flight to quality has been going on in crypto markets for quite some time as investors increased their exposure to safe-haven assets. As a result, Bitcoin's dominance has been growing steadily since the start of the year and has already surpassed the 55% level. Jerome Powell’s comments may change the market sentiment and boost investors’ appetite for risk. Traditionally, markets pay close attention to the Fed Chair’s comments, so they will have a major impact on market dynamics. In case Powell signals that the Fed is ready to start cutting rates aggressively to provide additional support to the economy, investors will rush to buy riskier assets, which will be bullish for cryptocurrencies. Most likely, Bitcoin will be the biggest beneficiary of dovish Powell. In this scenario, investors’ demand for altcoins should also increase as they will search for bargains among coins that have suffered serious pullbacks in recent months. Next week will be extremely important for financial markets. On September 18, the Fed will announce its interest rate decision and start the new rate cut cycle. Markets expect that the most probable scenario is a 25 bps rate cut. It should be noted that traders do not rule out the possibility of a 50 bpd cut. From a big-picture point of view, the Fed is expected to cut rates by 75 - 100 bpd by the end of this year to provide support to the labor market, which has already started to show signs of weakness. expect expect Rate cuts improve the liquidity situation in the markets and make money cheaper, which usually serves as support for riskier assets. However, markets do not look too bullish right now. Crypto markets have settled well below highs that were seen back in March and remain under some pressure. The tech-heavy NASDAQ index has pulled back from this year’s highs by roughly 10%. Why are markets not rallying ahead of the start of the new rate-cut cycle? Markets are worried about the potential slowdown of the global economy. The situation in China’s economy is a key problem for investors. The country’s economy has not fully recovered after the coronavirus pandemic, and the government’s attempts to provide stimulus have not yielded tangible results. China’s real estate sector, which was one of the key drivers of the country’s growth, shows no signs of improvement. The recent data indicates that China’s imports increased by just 0.5% year-over-year in August. Put simply, China’s demand remains under material pressure. Meanwhile, it looks like the U.S. labor market has started to cool down, which signals that the U.S. economy may be slowing down. Worries about weak China and the potential slowdown of the American economy have impacted investors’ risk appetite. Both cryptocurrencies and tech stocks are sensitive to fluctuations in market sentiment. When investors are ready to increase their risks in search of profits, they buy cryptocurrencies and tech stocks. In the opposite scenario, which implies rising demand for safe-haven assets, crypto and tech find themselves under pressure. The flight to quality has been going on in crypto markets for quite some time as investors increased their exposure to safe-haven assets. As a result, Bitcoin's dominance has been growing steadily since the start of the year and has already surpassed the 55% level. Jerome Powell’s comments may change the market sentiment and boost investors’ appetite for risk. Traditionally, markets pay close attention to the Fed Chair’s comments, so they will have a major impact on market dynamics. In case Powell signals that the Fed is ready to start cutting rates aggressively to provide additional support to the economy, investors will rush to buy riskier assets, which will be bullish for cryptocurrencies. Most likely, Bitcoin will be the biggest beneficiary of dovish Powell. In this scenario, investors’ demand for altcoins should also increase as they will search for bargains among coins that have suffered serious pullbacks in recent months.

The Fed is Ready to Cut Rates: Where’s the Crypto Market Growth?

The current state of the credit markets is giving a false sense of security, driven more by the booming demand for limited supply rather than economic fundamentals. This could be setting the stage for a significant reckoning. Experts like Mark Spitznagel warn that we are in the 'greatest credit bubble in history.’ According to him, this bubble is fueled by years of artificially low interest rates and excessive liquidity. The situation is evident in high levels of corporate and public debt, which are seen as unsustainable in the long term. The burst of this credit bubble could lead to a severe market crash. This event would potentially drag interest rates to new lows. Source: Deloitte The Warning Signs Spitznagel isn't alone in his concerns. Indicators such as the yield curve inversion—a historically reliable predictor of recessions—have been flashing warning signals for some time. The U.S. 3-month yield has been higher than the 10-year yield for 22 months, marking the longest inversion in history. According to Jim Bianco of Bianco Research, it typically takes around 66 days after the yield curve disinverts for the economy to crack. Adding to these concerns is the rising debt burden across various sectors of the economy. U.S. non-financial corporations have accumulated a record $13.7 trillion in debt, while total global debt hit a record $315 trillion in the first quarter of 2024. Much of this debt is government-related, but corporate and consumer debt levels are also alarmingly high, raising questions about sustainability. Scenarios to Consider While the warning signs are concerning, not all analysts are on the same page. Some argue that the U.S. economy remains resilient and can prevent a major downturn. Proponents of this view highlight the possibility of a soft landing where inflation is gradually brought under control without triggering a recession.\ Others believe that even if a bubble exists, it may continue to inflate before bursting. Bubbles tend to reach euphoric highs before collapsing, which means that the market could still see gains in the near term before any potential downturn. For retail investors, he advises patience and caution, suggesting a focus on basic S&P 500 index funds and maintaining a safety margin to avoid being forced to sell during market lows. Navigating the Stock Market Amidst Declining Rates Historically, Federal Reserve rate cuts have signaled prosperous times for equities, as lower rates make equities more attractive relative to bonds. This pattern has held true for the better part of four decades (refer to the chart). During these periods, the Fed typically began easing monetary policies before economic conditions deteriorated into a recession, often spurring significant rallies in the equity markets. Fed Chair Jerome Powell has hinted at potential rate cuts starting from September 2024. The lower rates would reduce the discount rate applied to future earnings, effectively increasing the present value of stocks. Some analysts predict that this could add approximately one multiple to the S&P 500's valuation, assuming long-term rates and inflation continue to decline as expected. Maxim Manturov, head of investment research at Freedom24, has a positive outlook for the equity market going forward: Concerns about a potential stock market crash and bubble have a place. Nevertheless, it makes sense to maintain an optimistic view of the market based on both fundamentals, such as earnings growth, Fed rate cuts and a booming technology sector, and other factors, especially in the longer term. In a normal scenario, following typical S&P 500 cycles and demographic trends, we can expect the S&P 500 Index to rise significantly by the end of the decade. This forecast is based on continued earnings growth and market valuation ratio. Additional factors include earnings growth and expanding price-to-earnings (PE) ratios. While annual PE increases may seem ambitious, they are justified by the resilience demonstrated by businesses during the COVID-19 pandemic. Companies' ability to maintain profits despite severe economic shocks emphasizes their resilience, guaranteeing a higher PE ratio than pre-pandemic levels. Balancing Risks and Opportunities While the prospect of rate cuts is undoubtedly positive for equities, investors should approach the market with caution. Overvaluation is not the only risk on the horizon. Factors such as a looming recession, geopolitical tensions, and potential disruptions from the U.S. election could all weigh on market performance. To navigate these uncertainties, many experts recommend a balanced portfolio approach. While growth stocks, particularly in the tech sector, have driven much of the market's gains in recent years, there is a growing case for diversifying into value stocks and international equities. This strategy can help mitigate risks associated with overvaluation and provide exposure to markets that may be less affected by U.S. monetary policy​. The current state of the credit markets is giving a false sense of security, driven more by the booming demand for limited supply rather than economic fundamentals. This could be setting the stage for a significant reckoning. Experts like Mark Spitznagel warn that we are in the 'greatest credit bubble in history.’ According to him, this bubble is fueled by years of artificially low interest rates and excessive liquidity. The situation is evident in high levels of corporate and public debt, which are seen as unsustainable in the long term. The burst of this credit bubble could lead to a severe market crash. This event would potentially drag interest rates to new lows. warn warn Source: Deloitte Deloitte Deloitte The Warning Signs Spitznagel isn't alone in his concerns. Indicators such as the yield curve inversion —a historically reliable predictor of recessions—have been flashing warning signals for some time. The U.S. 3-month yield has been higher than the 10-year yield for 22 months, marking the longest inversion in history. According to Jim Bianco of Bianco Research, it typically takes around 66 days after the yield curve disinverts for the economy to crack. inversion inversion around around Adding to these concerns is the rising debt burden across various sectors of the economy. U.S. non-financial corporations have accumulated a record $13.7 trillion in debt, while total global debt hit a record $315 trillion in the first quarter of 2024. Much of this debt is government-related, but corporate and consumer debt levels are also alarmingly high, raising questions about sustainability. Scenarios to Consider While the warning signs are concerning, not all analysts are on the same page. Some argue that the U.S. economy remains resilient and can prevent a major downturn. Proponents of this view highlight the possibility of a soft landing where inflation is gradually brought under control without triggering a recession.\ Others believe that even if a bubble exists, it may continue to inflate before bursting. Bubbles tend to reach euphoric highs before collapsing, which means that the market could still see gains in the near term before any potential downturn. For retail investors, he advises patience and caution, suggesting a focus on basic S&P 500 index funds and maintaining a safety margin to avoid being forced to sell during market lows. Navigating the Stock Market Amidst Declining Rates Historically, Federal Reserve rate cuts have signaled prosperous times for equities, as lower rates make equities more attractive relative to bonds. This pattern has held true for the better part of four decades (refer to the chart). During these periods, the Fed typically began easing monetary policies before economic conditions deteriorated into a recession, often spurring significant rallies in the equity markets. Fed Chair Jerome Powell has hinted at potential rate cuts starting from September 2024. The lower rates would reduce the discount rate applied to future earnings, effectively increasing the present value of stocks. Some analysts predict that this could add approximately one multiple to the S&P 500's valuation, assuming long-term rates and inflation continue to decline as expected. Maxim Manturov, head of investment research at Freedom24, has a positive outlook for the equity market going forward: Concerns about a potential stock market crash and bubble have a place. Nevertheless, it makes sense to maintain an optimistic view of the market based on both fundamentals, such as earnings growth, Fed rate cuts and a booming technology sector, and other factors, especially in the longer term. In a normal scenario, following typical S&P 500 cycles and demographic trends, we can expect the S&P 500 Index to rise significantly by the end of the decade. This forecast is based on continued earnings growth and market valuation ratio. Additional factors include earnings growth and expanding price-to-earnings (PE) ratios. While annual PE increases may seem ambitious, they are justified by the resilience demonstrated by businesses during the COVID-19 pandemic. Companies' ability to maintain profits despite severe economic shocks emphasizes their resilience, guaranteeing a higher PE ratio than pre-pandemic levels. Balancing Risks and Opportunities While the prospect of rate cuts is undoubtedly positive for equities, investors should approach the market with caution. Overvaluation is not the only risk on the horizon. Factors such as a looming recession, geopolitical tensions, and potential disruptions from the U.S. election could all weigh on market performance. To navigate these uncertainties, many experts recommend a balanced portfolio approach. While growth stocks, particularly in the tech sector, have driven much of the market's gains in recent years, there is a growing case for diversifying into value stocks and international equities. This strategy can help mitigate risks associated with overvaluation and provide exposure to markets that may be less affected by U.S. monetary policy​.

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