BITCOIN price, SP500, FOMC-Fed Funds Rate. Today will be hot🔥

1 de fev. de 2023

In 9 hours (from the moment the idea is published), the FOMC meeting will announce the new Fed Funds rate

At the previous meeting on 12/14/2022, the rate was raised from 4.00% to 4.50%
And then, the forecast was more than 70% that on 02/01/2023 the rate would be raised by another +0.5%, and on 03/22/2023 +0.25%

However, over the past month, US economic indicators have shown positive dynamics, sometimes even better than expected.
CPI 12/01/2023 - 6.5%, and GDP with a forecast of 2.6%, - 26.01.23 = 2.9%.
Everything was as the Fed wanted and as the markets were "guided".

Most financial markets took this news very positively, including the cryptocurrency market.
Roughly speaking, the announcement of today's rate has already been "priced in" to current prices.
Moreover, 99.7% expect that due to improved macroeconomic indicators, the US will announce a rate hike of only +0.25% today, not 0.5% as predicted a month earlier.
And more than 82% believe that the rate will be raised by +0.25% to 5% in total on 03/22/2013.

To summarize:
- the announcement of a rate within the expected range of 4.50-4.75% will act as a driver for the continued growth of both the SP 500 and the crypto market. Of course, increased volatility is guaranteed, which may be used to try to knock "extra passengers" out of long positions with a squeeze down.
- The announcement of a rate of 5.00% or higher is guaranteed to bring down both the SP 500 and the crypto market. How long the fall down will last is "another question".

We have depicted these two possible scenarios as fractals.
Which one do you like better: blue or white? Vote in the comments

SP500 also has two possible scenarios:


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1 de fev. de 2023

Nota

🔥FOMC raised the rate by 25 bps to 4.75%

✅This year's federal funds futures lay another 25bp rate hike in March and two 25bp rate cuts in November and December.

As usual, let's publish the main points of J. Powell's speech and his answers to journalists' questions👇

1 de fev. de 2023

Nota

The main theses of the speech of Fed Chairman J. Powell:

▪️FOMC is committed to getting inflation back to 2% to ensure price stability (the current CPI level is 6.5%);
▪️ Effect restraint has shown positive momentum in commodity prices, but not in services (because of high wage levels), so it is too early to talk about pausing for a rate hike;
▪️ Revision the necessary rate level will occur as new macro data becomes available, particularly future two CPI reports (February 14 and March 14), and the Fed will share a new action plan at its next meeting on March 22;
▪️The Fed doesn't want to overdo it in tightening monetary policy, but if it does happen, it has the tools to fix it (QE and a rate cut);
▪️ Doesn't matter look on tightening monetary policy the labor market remains unbalanced because of the high number of open jobs (which goes along with inflation);
▪️The FED believes that a 2% inflation rate can be achieved without a recession and the economy will continue to grow (soft landing);
▪️The main factors for the decision to raise the rate further are the labor market and price stability;

A lot of inputs that we will need to be analyzed to understand where crypto will go next, looking to the other markets