Markets Plummet as Inflation Comes In Hot

The Breakdown

Blockworks

Investing, Business

4.8 • 786 Ratings

🗓️ 14 September 2022

⏱️ 18 minutes

🔗️ Recording | iTunes | RSS

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Summary

This episode is sponsored by Nexo.io, Chainalysis and FTX US. July’s inflation report provided the first glimmers that the U.S. might have turned a corner in its fight against inflation. For the past several days, investors have been betting on a continuation of that trend from July into August. Unfortunately, the inflation print for August came in hotter than expected, sending markets reeling and increasing the odds of more drastic Fed rate hikes down the road. - Nexo is a security-first platform where you can buy, exchange and borrow against your crypto. The company ensures the safety of your funds by employing five key fundamentals including real-time auditing and recently increased $775 million insurance on custodial assets. Learn more at nexo.io. - Chainalysis is the blockchain data platform. We provide data, software, services and research to government agencies, exchanges, financial institutions and insurance and cybersecurity companies. Our data powers investigation, compliance and market intelligence software that has been used to solve some of the world’s most high-profile criminal cases. For more information, visit www.chainalysis.com. - FTX US is the safe, regulated way to buy Bitcoin, ETH, SOL and other digital assets. Trade crypto with up to 85% lower fees than top competitors and trade ETH and SOL NFTs with no gas fees and subsidized gas on withdrawals. Sign up at FTX.US today. - I.D.E.A.S. 2022 by CoinDesk facilitates capital flow and market growth by connecting the digital economy with traditional finance through the presenter’s mainstage, capital allocation meeting rooms and sponsor expo floor. Use code BREAKDOWN20 for 20% off the General Pass. Learn more and register at coindesk.com/ideas. - Enjoying this content? SUBSCRIBE to the Podcast Apple: https://podcasts.apple.com/podcast/id1438693620?at=1000lSDb Spotify: https://open.spotify.com/show/538vuul1PuorUDwgkC8JWF?si=ddSvD-HST2e_E7wgxcjtfQ Google: https://podcasts.google.com/feed/aHR0cHM6Ly9ubHdjcnlwdG8ubGlic3luLmNvbS9yc3M= Join the discussion: https://discord.gg/VrKRrfKCz8 Follow on Twitter: NLW: https://twitter.com/nlw Breakdown: https://twitter.com/BreakdownNLW “The Breakdown” is written, produced by and features Nathaniel Whittemore aka NLW, with editing by Rob Mitchell and research by Scott Hill. Jared Schwartz is our executive producer and our theme music is “Countdown” by Neon Beach. Music behind our sponsors today is “Razor Red” by Sam Barsh and “The Life We Had” by Moments. Image credit: Malte Mueller/Getty Images, modified by CoinDesk. Join the discussion at discord.gg/VrKRrfKCz8.

Transcript

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0:00.0	Indeed, one of the ironies is that the market's recent rally makes the Fed more likely rather
0:04.4	than less likely to continue their hawkishness. The Fed deals in psychology and really needs to
0:09.6	convince markets it's willing to do what it takes for however long it takes for prices to come down.
0:16.0	Welcome back to The Breakdown with me, NLW. It's a daily podcast on macro, Bitcoin, and the big picture power shifts remaking our world.
0:25.8	The breakdown is sponsored by nexo.io, chain aliasis, and FtX, and produced and distributed by CoinDesk.
0:33.9	What's going on, guys? It is Tuesday, September 13th, and today we are talking about inflation
0:39.4	coming in hot and what it means for the economy. Before we get into that, however, if you are
0:45.6	enjoying the breakdown, please go subscribe to the show, give it a rating, give it a review, or if you
0:49.9	want to dive deeper into the conversation, come join us on the Breakers Discord. You can find a link
0:54.7	of the show notes or go to bit.ly slash breakdown pod. Also a disclosure as always. In addition to them
1:00.2	being a sponsor of the show, I also work with FTX. All right, folks, well, as we discussed yesterday,
1:06.4	today was going to be a big day one way or another. It was inflation print day, meaning we were going
1:13.0	to get numbers from the Bureau of Labor Statistics about August's inflation. This is the most
1:18.8	anticipated data point in markets right now, because it's really the report card on how
1:23.8	things are changing. While markets had already priced in another 75 basis point hike for this
1:29.8	coming FOMC meeting next week, the inflation print really wasn't about whether or not that was going
1:35.1	to happen, but instead the anticipation was whether we'd see a continuation of the trend that we saw
1:40.5	last month, which was, of course, inflation going down, or at least leveling off.
1:45.9	If we saw something similar, it would be confirmation of the inflation has peaked narrative,
1:50.7	which would mean that even if there was perhaps a few months of lag, the Fed could at some point
1:55.1	start to itself peak the aggressiveness of monetary tightening as well, which would, of course,
2:00.1	mean that assets could take
	...

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