Federal Reserve Manipulates Crypto Prices: Wall Street Analyst
Caleb Franzen, senior market analyst at Cubic Analytics, explained how the Federal Reserve regulates asset prices at Anthony “Pomp” Pompliano’s “Best Business Show” on June 20.
Asked about the links between a wide range of assets and the current economic climate, he noted that yields and asset prices have an inverse relationship.
A leading market expert has spoken out against the effect of the United States Federal Reserve (Fed) on crypto and other asset values due to its flawed monetary policies.
The Fed is behind the curve
Assets are selling across the board as the Fed tightens monetary policy and Treasury rates rise.
There won’t be a bull market until we see a real change in the yield environment, he continued.
Financial specialists believe that the crypto market will not improve until the macroeconomic monetary situation stabilizes, which means further rate hikes and a significant drop in inflation.
Despite the Fed’s changes, that’s unlikely to happen for a few months, as it’s already at a four-decade high of 8.6%. It took about 18 months from the first breach of the 2% target to reach the terrible levels of today.
In this scenario, Franzen thinks the Fed is behind the curve, so a reversal in the inflation data could indicate a “broad expectation of a changing monetary policy climate.”
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Is it a model?
When comparing current market circumstances to the crypto bear market of 2018, the bottom was hit in December when the Federal Reserve publicly halted its rate hikes.
The change came in the same month as a sharp decline in stock markets. Similar meltdowns occurred in March 2020, when the Federal Reserve said it would continue to support the monetary and financial systems for longer.
Crypto markets, on the other hand, peaked in November 2021, when the Fed indicated that it would begin to decline. Charlie Bilello, 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 significant influence over asset prices and market cycles, showing that it is well behind the curve.