Operating at the Intersection of Technology and the Capital Markets
Tag: The Fed
Last year we predicted 2022 Real GDP in the 0-2% range (The Atlanta Fed's GDPNow cast for Q1'22 is 0.5% as of March 8th). A recession this year is inevitable as the Fed moves to increase the Fed Funds rate and migrates from Quantitative Easing to Quantitative Tightening (Thereby shrinking the money supply). The first … Continue reading Tangible Value When Inflation Persists
The Fed's digital U.S. Dollar will happen. The question is which FinTech firms and traditional Financial Institutions will best leverage it. The Fed will quickly become a FinTech firm and Consumer Depository Institution of primary importance once it goes live with its digital U.S. Dollar. A whole new slate of FinTech firms will rise, building … Continue reading Leveraging The Fed’s Digital Dollar
The Fed, Treasury and the SEC fired a shot at stablecoins. It feels to us that the three Federal agencies are clearing a path for the digital dollar. Stablecoins are crypto currencies that are pegged to a fiat currency and thus behave similarly to fiat currencies and therefore represent a potential threat to fiat currencies. … Continue reading The Fed & Treasury Are Clearing The Runway For The Digital Dollar
A U.S. CBDC Means Less Privacy for Americans, More Competition for Banks, End of Days for Crypto. (Tickers mentioned: JPM, BAC, WFC) On Thursday Federal Reserve Chairman Jerome Powell made a statement about the Fed's progress in exploring a U.S. CBDC ("Central Bank Digital Currency", see the below video). Powell assured viewers that a U.S. … Continue reading A Digital Dollar Is Coming
We have said it on our TEK2day Podcast and in conversations with some of you that the Fed's next move is to accelerate its QE effort to control long bond yields. This may occur as soon as this month. An interest rate hike is not coming this year in our view. There is far too … Continue reading The Fed’s Next Move Is To Ramp QE, Not Raise Rates.
Private markets are no longer primarily determined by the actions of private buyers and sellers. The State now controls private markets as the primary mover. Guessing the timing, scale and duration of massive fiscal and monetary programs has superseded if not largely replaced fundamental analysis. That's not to say that fundamentals do not matter, but … Continue reading State-Led Capitalism
Dovish Fed Chair Jerome Powell held day 2 of his semi-annual monetary report to Congress today. To summarize, the Fed's got your back if you are a company of most any size, if you participate in the capital markets, if you are a politician looking for a free lunch, if you desire low interest rates … Continue reading This Dove’s Not Crying
Q3'20, Q4'20 and calendar 2021 consensus estimates need to come down. Why? 21% unemployment (U6 measure), permanent economic damage that businesses suffered (and will continue to suffer), as a result of the shutdown, the COVID "back-to-work tax", the threat of a second COVID wave, geopolitical risk, record debt levels and social unrest have created more … Continue reading Expect A Bumpy Ride For The Economy and The Capital Markets Over The Next Several Years.
The Fed's behavior in recent months has been something out of a horror movie. The low interest rate, expansionary monetary policies introduced by former Fed Chair Bernanke and continued by former Fed Chair Yellen have dramatically accelerated under current Fed Chair Powell. Bernanke dealt in $Billions, Chairman Powell prefers $Trillions. Click any of the charts … Continue reading The Forever Bubble-Blowing Fed
The Federal Reserve is crowding out private capital. It has engaged in what feels like perpetual quantitative easing ("QE") since 2008. The Fed buying corporate credit is the latest perversion from this increasingly political institution. Federal Reserve assets continue to grow pushing against the $7 Trillion mark. Fed assets could potentially cross the $10 Trillion … Continue reading The Fed Is Crowding Out Private CapitalPremium
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