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Caleb Franzen, the senior market analyst at Cubic Analytics, explained how the Federal Reserve regulates asset prices on Anthony “Pomp” Pompliano’s “Best Business Show” on June 20.
When questioned about connections between a wide range of assets and the present economic climate, he noted yields and asset prices have an inverse relationship.
A top market expert has spoken out against the Federal Reserve of the United States (Fed) effect on crypto and other asset values as a result of its faulty monetary policies.
The Fed is behind the curve
Assets are selling down across the board as the Fed tightens monetary policy and Treasury rates rise.
There will be no bull market until we see a genuine shift in the yield environment, he continued.
Financial specialists believe that the crypto market will not improve until the macroeconomic monetary situation is stabilized, which means additional rate rises and a significant drop in inflation.
Despite the Fed’s changes, this is unlikely to happen for some months because it is already at a four-decade high of 8.6 percent. It took approximately 18 months from the first time it exceeded the 2% goal to reach today’s terrible levels.
In this scenario, Franzen believes the Fed is behind the curve, thus a rollover in inflation statistics might indicate a “general forecast of a change in the monetary policy climate.”
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Is this pattern?
When comparing current market circumstances to the crypto bear market of 2018, the bottom was reached in December, when the Federal Reserve publicly stopped its rate rises.
The change occurred in the same month as a big drop in stock markets. Similar collapses happened in March 2020, when the Federal Reserve said that it will continue to support the monetary and financial systems longer.
Crypto markets, on the other hand, peaked in November 2021, when the Fed indicated that it would begin tapering. Charlie Bilello, the founder, and CEO of Compound Capital Advisors made a similar prediction and analysis to Pomp a few days ago.
The Federal Reserve, according to the Wall Street analyst, has a significant influence over asset prices and market cycles, showing that it is well behind the curve.
Nancy J. Allen is a crypto enthusiast, with a major in macroeconomics and minor in business statistics. She believes that cryptocurrencies inspire people to be their own banks, and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning. She frequently researches, and posts content on the top altcoins, their theoretical working principles and technical price predictions.
