The Fed has a dilemma, almost a race, between two things as they raise rates here.
1) Raising rates generally results in tighter borrowing standards on a lag. This can reduce lending-driven money creation and lead to disinflationary demand destruction around the margins.
https://void.cat/d/LciK171UhVRj6yZuNHk2u7.webp
2) At high public debt levels, raising rates also increases federal interest expense, which increases the fiscal deficit, which is a source of ongoing inflationary stimulus into the economy.
https://void.cat/d/FX7vWUrUF4kiNidN1g5PQ3.webp
In the 1940s, inflation was fiscal-driven and public debt was high.
In the 1970s, inflation was mostly lending-driven and public debt was low.
Currently, the Fed is using a 1970s-style playbook to deal with 1940s-style fiscal-driven inflation.
Great Summary!
Sentiment stays very positive on BTC. Also noteworthy, that the sentiment is very strongly positive, while crypto in general has a negative sentiment.
The more pressure on your freedom, the more you value it. The amount of people that will be pushed into decentralized solutions will increase with every new act.
Keeping will be a legacy for your family. Way more bonding and lasting than a higher inheritance for your kids because ib BTC profits. IMO
Mostly a repricing of FED’s position on hikes. Wouldn’t interpret too much into it.
Quite some measures point to a change in regime. We’ll see, but for now, there’s still high probability, that the current price action was just a mean reversion. A new trend still has to establish.
Global Macro Regime still seems in cautious mode. It has been quite a long phase in the current regime, the Median is usually 180 days, a switch into a different regime seems likely during the next couple of months.
Also, interesting, that BTC seems to be less entangled with Liquidity. Quite a shift from previous weeks.
Sentiment Analysis seems positive for Crypto overall. Even SEC enforcements seem
to have a positive spin.
Noteworthy: