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2022-08-25 08:54:45
Market situation
The stock market fell yesterday, causing crypto to fall as well. BTC dropped to around $29,000. Altcoins also follow a downtrend.
US stocks opened slightly green but ended the session still down in all three indexes. Stock futures contracts were almost flat and rose insignificantly.
The stock market and also the crypto market fell due to the warning of JPMorgan Chase CEO Jamie Dimon. He said he is preparing the largest US bank for an upcoming economic storm. At the same time, he also advises investors to have the same preparation.
The two main factors that worry the CEO of JPMorgan Chase are the policy of quantitative tightening and the protracted war. The Fed will start to really implement quantitative tightening policy, tightening cash flow from this month. With this policy, the Fed starts selling bonds monthly at $47.5 billion. The monthly bond sales thresholds will double to a total of $95 billion expected in September of this year. The Fed’s goal is to shrink its balance sheet from its current $8.9 trillion to $3 trillion in three years.
The other big factor that worries Jamie Dimon is the Ukraine war and its impact on the economy. This war shows no sign of ending and the ban will continue to affect the circulation of goods such as food and fuel. Oil could rise to $150 to $175 per barrel, he said. The increase in oil prices also leads to a series of other industries using it such as transportation, manufacturing, …
According to Jamie Dimon, the two big things he fears above are not just “dark clouds” but possibly “a storm” to be experienced and prepared for. The bank will also be more careful in budget spending.
Treasury Secretary Janet Yellen emphasized that the White House is ready to implement a number of strategies to reduce the inflation burden. She also admitted that the current level of inflation is too high and she was wrong when she said last year that inflation was not high and only temporary.
Yellen listed inflation-lowering efforts aimed at prescription drug costs, budget deficits and oil production that could drive prices down at almost the fastest rate since the early days of the Reagan administration. The main tool is still the Fed to raise interest rates and tighten money sources to reduce inflation.
Not only the United States, major countries are also facing a similar inflation situation. The Bank of Canada yesterday decided to raise interest rates by 0.5%, so interest rates have increased to 1.5%. The bank is also continuing its quantitative tightening policy. In early May, the UK’s central bank also increased 0.25% to 1%, equivalent to the current Fed rate. Although the European Central Bank has not yet raised interest rates, it also plans to start raising rates in July.
Some crypto news from the past day:
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Binance Labs, the investment arm of Binance, has launched a $500 million fund in partnership with global investors including DST Global Partners and Breyer Capital to drive innovation across the crypto landscape with Web3 and blockchain.
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John Williams, president and chief executive officer of the Federal Reserve Bank of New York, said get ready for a fundamental change in currency and payments. He went on to say that central bank digital currencies (CBDCs) and stablecoins are backed by liquid assets.
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Former product manager at OpenSea, Nathaniel Chastain has been charged with NFT insider trading on OpenSea. Prosecutors allege that Chastain purchased 45 NFTs through anonymous hot wallets and anonymous accounts on OpenSea and then sold them for profit shortly thereafter.
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Solana has just experienced an incident that caused the network to go offline for the 7th time in the past 12 months. This latest outage lasted about 4 and a half hours as validators attempted to restart the mainnet around 21:00 UTC, according to the crash report.
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Finally, Binance CEO Changpeng Zhao has also spoken out about supporting LUNA on their exchange. He confirmed that supporting LUNA is aimed at assisting damaged users holding LUNA to receive new coin airdrops. He also expressed skepticism around the revival plan for the Terra ecosystem and the launch of the new LUNA token.
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#Prepared #Economic #Storm
