The economy looks poised to go bullish.
But this can be disaster for many of us. Such strength can unleash a series of rate hikes.
Reading the Fed’s next move🌍🧵
Macro Pulse Update 09.07.2023, covering the following topics:
1️⃣ Macro events for the week
2️⃣ Bitcoin Buzz Indicator
3️⃣ Bitcoin ETFs
4️⃣ US economic indicators
5️⃣ Market review
1️⃣ Macro events for the week
2️⃣ Bitcoin Buzz Indicator
3️⃣ Bitcoin ETFs 🟢
Bitcoin (BTC) remained relatively stable around the $30.5k USD range
BTC dominance remained above 51%, indicating its continued prominence in the cryptocurrency market.
Fidelity joined other major U.S. financial institutions in filing a spot bitcoin ETF application with the SEC, aiming to secure approval for retail traders to purchase BTC shares on major U.S. exchanges.
First leveraged bitcoin futures ETF, 2x Bitcoin Strategy ETF (BITX), started trading last week. It aims to provide returns corresponding to 2x the performance of the S&P CME Bitcoin Futures Daily Roll Index.
4️⃣ US economic indicators
Economic indicators are looking optimistic (beyond expectation), which may prompt the Fed to resume interest rate hikes.
Positive economic data has raised concerns about the Federal Reserve potentially maintaining higher interest rates for a longer duration to address inflation concerns.
🔴Treasury Yield: The 2-year Treasury yield has climbed to 5.004%, a level last seen in June 2007, while the 10-year Treasury yield rose to 4.04%. These increases suggest expectations of higher borrowing costs.
🔴Employment: Substantial rise of 497,000 private sector jobs in June, surpassing expectations. This positive indication hints at the possibility of a stronger-than-expected non-farm payrolls report, which could influence the Fed's decision on interest rate hikes.
🟢Consumer prices and spending: Grew slower than anticipated, with the Fed's preferred inflation measure, the personal consumption expenditures price index, showing its slowest pace in two years. These data points suggest a potential easing of inflationary pressures.
5️⃣ Market review
Reviewing the Macro for the past month in June 2023:
🟡Rate Pause: Fed has decided to maintain interest rates at their current level, signaling a cautious approach to assessing the need for further rate hikes. Although some policymakers favored an increase due to resilient inflation and economic activity, the majority agreed to keep the federal funds rate between 5% and 5.25%.
🔴Interest-rate Hike? Pricing in a high probability (93%) of the Fed raising rates to a range between 5.25% and 5.5% in July, reaching a 22-year high. This reflects market expectations of tightening monetary policy in the near term.
🔴Bank failures: Recent bank failures have raised concerns about a tighter credit crunch, leading to the Fed's uncertainty regarding the appropriate level of rate increases. Major banks showed resilience.
🔴Stock market: Stock indexes experienced declines due to reports of slower expansion in China's services sector and the release of the Fed's meeting minutes.
Thread: https://twitter.com/arndxt_xo/status/1677924385884344320
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