Will we get the fed pivot right now?

Wind_FURY

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Quote from: adaseb on March 10, 2023, 02:35:21 PM

Choas across all the markets. Silicon Valley bank has collapsed in a manner of hours due to a bank run caused by the fed hikes. Right now there are half a dozen banks with double digit losses trading like low cap alt-coins. The worse of this is Charles Schwab. And I think the fed will finally step in to protect it.

The fed doesn't care about Silvergate or Silicon Valley but Schwab is pretty big. I think any day now we will get the pivot and all markets will rally which are considered risk-on. Sure inflation is bad but I don't think the fed wants a major bank collapsing sending shockwaves across the entire financial system.

If the fed pivots then Crypto and stocks should rally. The hint is in the bond markets. Currently they are rallying like crazy.

I don't believe that you have done the proper research to say such a thing. Because if the Federal Reserve pivots now, without contolling and bring inflation down, what will definitely happen is MORE inflation, going into the direction of hyperinflation. The whole economy would go into a recession, THEN a depression.

The recession is UNPREVENTABLE. The Federal Reserve MUST cause a recession through tightening, and through rate hikes, to get money out of the system, to lower demand, and THAT will bring inflation down. If the Federal Reserve doesn't do enough tightening/rate hikes then inflation will stay and it will do the job for the Federal Reserve = cause a recession. If the Federal Reserve pivots, and cuts or pauses interest rate hikes, then inflation will surge. What would the Federal Reserve do if inflation surges again? More aggressive tightening/rate hikes or nothing = both go to recession.

Edwardard

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New CPI data came just in guys from the US:
CPI:
6% YoY, 0.4% MoM
Forecasted: 6% YoY, 0.4% MoM

Core:
5.5% YoY, 0.5% MoM
Forecasted: 5.5% YoY, 0.4% MoM

The CPI data came in as expectation, so the interest rates won't rise in the next FED meeting (either they will reduce it or it will remain the same). Some sight of relief?! But still uncertain about the pivot point, as usual.

EDIT: And BTC just made a new high of this year with this CPI

dansus021

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Well I don't like this domino effect but I hope the FED Steps into Schwab, the collapse of Silicon Valley Bank already triggered the FDIC(Federal Deposit Insurance Corporation) and make things settle at least for now.

Just doing a quick search the Schwab stock is already fell but the companies denies if they will bankrupt too and I hope so even Im not their customer or US citizen

SVB collapse only hit their founder "billionaire Charles schwab-hit-by-one-of-worst-finance" https://www.bloomberg.com/news/articles/2023-03-13/svp-fallout-billionaire-charles-schwab-hit-by-one-of-worst-finance-wipeouts

Charles Schwab shares drop 12% even as the firm defends financial position - https://www.cnbc.com/2023/03/13/charles-schwab-shares-head-for-worst-day-ever-as-fears-of-banking-crisis-deepen.html

STT

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Forget pivot the hinges for FED are broken, thats my view. When does the door fall off rather then speculating when they loosen or tighten their idea of policy, the situation for FIAT is fait accompli we just wait for that process to unwind and the rest is noise and excuses imo. The damage done to long term value in common currency is already out there, I dont see any easy way for them to stabilize nevermind arrest and reverse the decline so what that equates to is endless inflation some identified and some unknown, unacknowledged losses to the common worker every year for decades.

adaseb

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The 2 year yield is <3.99% right now. Basically it dropped 100bps since last week. And last week we were expecting more rate hikes... now its the complete opposite. It seems there will be actually cuts at the end of the year.

So far GS and other banks are predicting this. No word yet from JPow. We didn't get a bailout but what they are proposing is very similar to a bailout and you know that the tax payer is going to be paying for it. Until we get the next meeting we won't know for sure.

el kaka22

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I am not entirely sure about this. I mean they "should", but just because they should doesn't mean that they will. The point is that during inflation if they increased the rates that would help, but the inflation is already calming down and banks are not making that much profit anymore, and the stocks are down as well, so they are even losing money right now, the same banks are also faced with this much payments that they need to make at the same time.

This all is a result that we are talking about something that will hurt us all in the long run. There is absolutely no other way that they could fix this, they need to pivot no matter what, lets hope that they do.

cryptomaniac_xxx

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Quote from: adaseb on March 10, 2023, 02:35:21 PM

Choas across all the markets. Silicon Valley bank has collapsed in a manner of hours due to a bank run caused by the fed hikes. Right now there are half a dozen banks with double digit losses trading like low cap alt-coins. The worse of this is Charles Schwab. And I think the fed will finally step in to protect it.

The fed doesn't care about Silvergate or Silicon Valley but Schwab is pretty big. I think any day now we will get the pivot and all markets will rally which are considered risk-on. Sure inflation is bad but I don't think the fed wants a major bank collapsing sending shockwaves across the entire financial system.

If the fed pivots then Crypto and stocks should rally. The hint is in the bond markets. Currently they are rallying like crazy.

And we did have a small rally in the last 24 hours? more than almost 8% and I think when already follow what the bond markets have been doing, so rally behind.

With that, he correlation is still there, no matter what we do and think that there is no relationship between crypto and traditional market, we can't deny the fact that we are all connected. Bitcoin is again above $22k, when we talk about the possibility that it might go down, actually it did when the price hits $19,xxx. But now we have a sort of relieved, even peaking at $22,7xx.

EarnOnVictor

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What sent the shockwave to the market was the tone and position of FED on the banking industry at large, and if truly the apex body would rescue Charles Schwab as you claimed, it should still not have a significant impact on the market, so I don't believe it would cause risk-on sentiment as the effect would be negligible.

The announcement actually caused a risk-off effect until Friday when NFP, Average hourly earnings and Unemployment rate news were released, and has helped to change the market sentiment to risk-on till now as the market weighs the stress of inflation on the US economy.

However, I believe this will be temporary, especially if tomorrow's report on CPI is positive. If not, the risk-on sentiment will linger.

Edwardard

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Quote from: adaseb on March 10, 2023, 02:35:21 PM

If the fed pivots then Crypto and stocks should rally. The hint is in the bond markets. Currently they are rallying like crazy.

I think the most recent dump started after Powell's speech just a few days ago about interest rates. He still believes that the fed will keep raising rates this whole year. The crash was maybe further catalysed by the USDC collapse ?! Seems like its not about the fed's action which moves the markets, but its only about their commentary where people react the most. They should pivot soon anyway as the economy keeps tanking which was their main mission.

adaseb

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I think both of these banks failed for the same reasons. They had way too much assets invested in long yield, low paying bonds. They had to sell them at a loss to make up for customer deposits. And when word of this got out, it caused a bank run and the bank basically decided it would be smarter to shut down or be taken over by FDIC then sell more bonds at a loss and create an even bigger hole.

I don't think they did anything shady. They basically were caught in the crossfire of what happens when interest rates go up. Issue is that next week SignatureBank can be next, along with FRC and WAL which also had crazy swings in stock price and got halted multiple times throughout the day.

stompix

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Blackjack.fun

Quote from: adaseb on March 10, 2023, 02:35:21 PM

Choas across all the markets. Silicon Valley bank has collapsed in a manner of hours due to a bank run caused by the fed hikes. Right now there are half a dozen banks with double digit losses trading like low cap alt-coins. The worse of this is Charles Schwab. And I think the fed will finally step in to protect it.

No need for it as they have no liquidity problems, it was a one time solid sell news that brought them down 12% but if you extend the graph you will see that shares were trading well below these levels in the whole 2018-21 period. Not every share drop is the end of the world, remember how some thought Tesla was done for because it crashed from $400 to $100? One month later they are at $175 again and if that doesn't sound like much, it's still 5 times since 2020 and a full 40% YTD.

In different cases, Silvergate went down because it has done business with stupid and not so honest people, SVB is getting hammered because it has invested so much in start-ups it has put itself in a really bad position, Schwab is getting hammered because its business model is not that attractive with the new rate hikes on the horizon, it still has three times the cash to assets rate the others two had.

adaseb

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Choas across all the markets. Silicon Valley bank has collapsed in a manner of hours due to a bank run caused by the fed hikes. Right now there are half a dozen banks with double digit losses trading like low cap alt-coins. The worse of this is Charles Schwab. And I think the fed will finally step in to protect it.

The fed doesn't care about Silvergate or Silicon Valley but Schwab is pretty big. I think any day now we will get the pivot and all markets will rally which are considered risk-on. Sure inflation is bad but I don't think the fed wants a major bank collapsing sending shockwaves across the entire financial system.

If the fed pivots then Crypto and stocks should rally. The hint is in the bond markets. Currently they are rallying like crazy.

Topic: Will we get the fed pivot right now? (Read 126 times)