The ‘Higher-for-Longer’ Fed Reality Hits Markets

The Breakdown

Blockworks

Investing, Business

4.8 • 786 Ratings

🗓️ 30 August 2022

⏱️ 16 minutes

🔗️ Recording | iTunes | RSS

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Summary

This episode is sponsored by Nexo.io, Chainalysis and FTX US. The week ended badly. Equities were down big and over the weekend crypto followed, with bitcoin (BTC) dipping under $20,000 and ether (ETH) losing 14% following Federal Reserve Chair Jerome Powell’s speech Friday at Jackson Hole, Wyoming. On today’s episode NLW explores how the markets are internalizing the reality of a “higher-for-longer” Fed. - Nexo is a security-first platform where you can buy, exchange and borrow against your crypto. The company safeguards your crypto by relying on five key fundamentals including real-time auditing and 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. - “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 “The Now” by Aaron Sprinkle and “The Life We Had” by Moments. Image credit: Bartolome Ozonas/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.
0:09.2	It's a daily podcast on macro, Bitcoin, and the big picture power shifts remaking our world.
0:14.8	The breakdown is sponsored by nexo.io, chain aliasis, and FtX, and produced and distributed by CoinDesk.
0:24.6	What's going on, guys? It is Monday,
0:31.1	August 29th, and today we are discussing the reality of the higher for longer fed hitting markets.
0:35.4	Before we get into that, however, if you are enjoying the breakdown, please go subscribe to it,
0:37.5	give it a rating, give it a review, or if you want to dive deeper into the conversation, come join us on the breakers discord. You can find a link in the show
0:42.2	notes or go to bit.ly slash breakdown pod. Also, a disclosure, as always, in addition to them being a
0:47.8	sponsor of the show, I also work with FTX. All right, guys, woof, what a weekend. Bitcoin went for a while under 20K, and just in general,
0:58.4	it felt like bad news had set in. So let's do a little bit of a macro preview for the week
1:03.3	and try to get a sense of why things are a little gloomy. So what set in was in one part
1:09.8	the reality coming out of Federal Reserve Chair
1:11.9	J. Powell's Jackson Hole speech.
1:14.4	We discussed this a bit on Friday's show, but it was just after the speech, and so people
1:18.7	hadn't fully internalized the message.
1:21.5	The message was succinct. The speech only lasted for eight minutes.
1:25.1	And effectively, it stripped all room for interpretation, all nuance,
1:29.2	and all hope for a Dovish pivot to come anytime soon.
1:33.3	Restoring price stability, said Powell, will likely require maintaining a restrictive policy
1:38.3	stance for some time. The historical record cautioned strongly against prematurely loosening
1:43.6	policy.
1:44.9	Powell explained that the inflation fight, quote, requires us to use our tools forcefully
	...

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