RIP Transitory Inflation, Long Live Quantitative Tightening

The Breakdown

Blockworks

Investing, Business

4.8 • 806 Ratings

🗓️ 2 June 2022

⏱️ 18 minutes

🔗️ Recording | iTunes | RSS

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Summary

This episode is sponsored by Nexo.io, NEAR and FTX US. On today’s episode, NLW marks the next phase in the shift in monetary policy. Starting this month, the Federal Reserve is going to allow U.S. Treasurys and mortgage-backed securities held on its balance sheet to expire without renewal. The goal is to reduce the overall balance sheet by billions of dollars per month. NLW explains how we got here, why the market is nervous and what might happen next. - Nexo is an all-in-one platform where you can buy crypto with a bank card and earn up to 16% interest on your assets. On the platform you can also swap 300+ market pairs and borrow against your crypto from 0% APR. Sign up at nexo.io by June 30 and receive up to $150 in BTC. - NEAR is a blockchain for a world reimagined. Through simple, secure, and scalable technology, NEAR empowers millions to invent and explore new experiences. Business, creativity, and community are being reimagined for a more sustainable and inclusive future. Find out more at NEAR.org. - 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. - Consensus 2022, the industry’s most influential event, is happening June 9–12 in Austin, Texas. If you’re looking to immerse yourself in the fast-moving world of crypto, Web 3 and NFTs, this is the festival experience for you. Use code BREAKDOWN to get 15% off your pass at www.coindesk.com/consensus2022. - 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, research by Scott Hill and additional production support by Eleanor Pahl. Jared Schwartz is our executive producer and our theme music is “Countdown” by Neon Beach. The music you heard today behind our sponsors is “Catnip” by Famous Cats and “I Don't Know How To Explain It” by Aaron Sprinkle. Image credit: Brendan Smialowski-Pool/Getty Images, modified by CoinDesk. Join the discussion at discord.gg/VrKRrfKCz8.

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, near an FtX, and produced and distributed by CoinDesk.
0:22.8	What's going on, guys? It is Wednesday, June 1st. Welcome to a new month. Today, we are talking
0:29.5	about the beginning of the era of quantitative tightening. Before we get into that,
0:34.8	however, a couple housekeeping notes. You can find the breakdown in two places.
0:40.0	The first is on the CoinDesk Podcast Network feed, which features both the breakdown as well as
0:44.1	other great Coin desk shows and comes out in the afternoon.
0:47.4	The Breakdown Only Feed features only the breakdown and comes out a little later in the evening.
0:52.5	Wherever you listen, if you were enjoying the show,
0:54.7	I would so appreciate it if you would take a little time to leave a rating and a review. It makes a big
0:59.6	difference. Also, a disclosure as always. In addition to them being a sponsor of the show,
1:04.7	I also work with FTX. And finally, coming up right around the corner is CoinDesk's Consensus Event 2022. It is happening
1:13.5	starting next week, June 9th through June 12th in Austin, Texas. They're calling it the
1:19.3	festival for the decentralized world, and what it tries to do differently is that it
1:23.0	showcases and celebrates all sides of this industry, including Bitcoin, blockchain, crypto ecosystems,
1:29.3	Web3, Metaverse, and so on and so forth. There are tons of fascinating speakers from the industry,
1:35.3	from the government. And if you are interested in going, head on over to coindesk.com
1:39.9	slash consensus 2022, and when you sign up, use code breakdown to get 15% off your pass.
1:46.8	So today, as I mentioned, is the beginning of quantitative tightening.
1:51.1	Some are calling it QT Day. But what does that mean?
1:54.9	Well, since the global financial crisis, we have been in a period of extremely dovish,
	...

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