Mohit Kumar, CFA
Mohit Kumar, CFA 1 minutes reading from Bitcoin

FOMC Tightens: Fed Tightens, FOMC Inflation Not Subdued

BTC macro crypto FOMC

1/n

Economic data strong, labor market resilient, PMIs indicating strong economic activity, MOM core inflation not subsiding, inflation not subsiding despite correction in fuel prices

2/n

All of this led to ultra hawkish Fed with 75 bps hike and 100-125 bps priced in for the rest of the year. This is the biggest and fastest tightening since 1980s

Fed concerned about buoyant housing prices

and committed to do everything to bring inflation below 2%

3/n

Likely macro environment

1. Fed tightening for next 3 months 2. Fed not easing for next 6 months 3. Inflation subsiding albeit at a lower pace, CPI above 6% YTD 4. Slowing economic activity in next 6 months

4/n

Earnings expectations:

1. Margins coming under increased pressure 3. Earning revisions downwards

Positioning:

1. EQ underweight and large speculative shorts 2. Low leverage in crypto

5/n

Expected asset performance:

Crypto and growth stocks will bottom out earlier than market, given likely peak in hawkish comments

1. EQ flat to bearish 2. Crypto flat 3. Gold and silver bearish 4. Industrial metals bearish 5. Growth outperforming value 6. 10Y yields down

This post is based on this twitter thread.

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