BREAKDOWN: How Markets Are Interpreting the Fed’s First Hike Since 2018
CoinDesk Podcast Network
CoinDesk
4.8 • 689 Ratings
🗓️ 17 March 2022
⏱️ 16 minutes
🧾️ Download transcript
Summary
Is a 25 basis point hike enough to stem the impact of inflation?
This episode is sponsored by Nexo.io, Arculus and FTX US.
Wednesday, the U.S. Federal Reserve increased its benchmark interest rate for the first time since 2018. This came despite an increasingly volatile economic landscape that includes the fallout from Russia’s invasion of Ukraine plus the supply chain impacts of COVID-19 shutdowns in China. NLW breaks down the market’s reaction to the anticipated hike, and explores how quantitative tightening is likely to proceed from here.
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“The Breakdown” is written, produced by and features Nathaniel Whittemore aka NLW, with editing by Rob Mitchell, research by Scott Hill and additional production support by Eleanor Pahl. Adam B. Levine is our executive producer and our theme music is “Countdown” by Neon Beach. The music you heard today behind our sponsor is “I Don't Know How To Explain It” by Aaron Sprinkle. Image credit: Nuthawut Somsuk/Getty Images, modified by CoinDesk. Join the discussion at discord.gg/VrKRrfKCz8.
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Transcript
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| 0:00.0 | Welcome back to The Breakdown with me, NLW. |
| 0:09.1 | It's a daily podcast on macro, Bitcoin, and the big picture power shifts remaking our world. |
| 0:15.0 | The breakdown is sponsored by nexo.io, Arculus, and FtX, and produced and distributed by CoinDesk. |
| 0:22.8 | What's going on, guys? It is Thursday, March 17th, and today we are talking about the absolute |
| 0:28.1 | tightrope that the Federal Reserve is walking as they try to tighten monetary policy in the context |
| 0:35.1 | of extremely hot inflation, slowing growth, and of course, serious |
| 0:40.7 | geopolitical disruption in the form of both the war in Ukraine, as well as in the context of |
| 0:47.2 | Chinese COVID-19 lockdowns. Before we get into that, however, if you are enjoying the breakdown, |
| 0:53.2 | please go subscribe to it wherever you listen to podcasts, give it five stars, leave a review, or if you want to get deeper into the conversation, come join us on the Breakers Discord. |
| 1:04.0 | You can find a link in the show notes or go to Bit.ly slash Breakdown Pod. |
| 1:08.0 | Also, a disclosure, as always, in addition to them being a sponsor of the show, |
| 1:12.8 | I also work with FTX. Now, we are back on our macro BS again, and it was Fed Day yesterday. |
| 1:21.9 | This Federal Open Markets Committee meeting has been highly anticipated, and if you listen to |
| 1:27.2 | this show regularly, you have most of |
| 1:29.0 | the background. But in brief, 2021 from a Fed perspective, was transitory land. It was the great |
| 1:35.3 | debate between the Fed who said that inflation was transitory, the product of dislocations |
| 1:40.8 | that happened in the wake of COVID-19 that would naturally work themselves out, |
| 1:45.1 | and the rest of the market, who basically said, no, it's not. |
| 1:48.2 | As inflation kept creeping throughout the year, the Fed finally had to concede the point, |
| 1:53.8 | and their language in tone shifted pretty dramatically in the late fall and early winter. |
| 1:59.4 | The language changed around the Powell renomination, which was all |
| 2:02.9 | focused on having the tools to fight inflation. By the December FOMC meeting, the Fed was talking |
... |
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