It Smells Like Something is Burning
Oct 21, 2022
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Earnings Revisited
Below is a chart that is both slightly jarring and fairly intuitive at the same time. The jarring aspect is obviously the rapid ascent of the expected terminal fed funds rate over the past six months. The intuitive part is that bitcoin does not like tightening monetary conditions and has steadily declined in direct opposition to the expected terminal rate.
Note that we are using the futures market pricing for the March FOMC meeting as a proxy for where the Fed is expected to pause its rate hikes. We had steadied for a bit around 4.25-4.50%, but recent weeks have seen this figu...