Cryptomustar
Friday, May 20, 2022
  • Home
  • Altcoin
  • Bitcoin
  • Ethereum
  • Litecoin
  • Cryptocurrency
  • Blockchain
  • Regulation
  • Market
  • Prices
  • ICO
No Result
View All Result
  • Home
  • Altcoin
  • Bitcoin
  • Ethereum
  • Litecoin
  • Cryptocurrency
  • Blockchain
  • Regulation
  • Market
  • Prices
  • ICO
No Result
View All Result
Cryptomustar
No Result
View All Result
Home Market

Fed Chair Powell’s Jackson Hole Speech Could Hint at US Dollar’s Future

by admin
August 26, 2020
in Market
0
Fed Chair Powell’s Jackson Hole Speech Could Hint at US Dollar’s Future
0
SHARES
4
VIEWS
Share on FacebookShare on Twitter


A speech by Federal Reserve Chair Jerome Powell scheduled for Thursday offers a reminder of just how dramatically once-slow-moving monetary forces have accelerated due to the devastating economic toll of the coronavirus pandemic. 

This time last year, President Donald Trump was vehemently criticizing Powell on Twitter for setting interest rates too high, as U.S. economic growth slowed and the national debt swelled past $22 trillion.

This time last year, then-Bank of England Governor Mark Carney delivered a speech at the Fed’s annual Jackson Hole Economic Symposium in Wyoming warning the U.S. dollar’s status as the de facto global currency contributes to an unsustainable international economic and monetary regime. He argued that world leaders should create a “synthetic hegemonic currency,” potentially provided “through a network of central bank digital currencies.” 

Fast forward to now, and the Jackson Hole conference has been forced to go virtual because of the coronavirus. Trump’s economic stewardship, including a U.S. stock market that many investors now say is propped up by the Fed’s $3 trillion of freshly printed money, has become a core issue in the 2020 presidential election. The national debt now stands at $26.5 trillion. Digital currencies are now being studied and pursued by central banks in China, the U.S. and just about everywhere else. Goldman Sachs recently warned the dollar risked losing its dominant reserve status. 

“The pandemic has sped up key structural trends and triggered substantial market swings,” strategists for the $7 trillion money manager BlackRock wrote this week. “The policy revolution was needed to cushion the devastating and deflationary impact of the virus shock. In the medium term, however, the blurring of monetary and fiscal policy could bring about upside inflation risks.”

Read more: The Federal Reserve Is Experimenting With a Digital Dollar

As the spread of the coronavirus earlier this year triggered lockdowns and quarantines, the global economy this year entered its deepest recession since the early 20th century. 

When markets from stocks to bitcoin swooned in March, the Fed slashed interest rates close to zero and has since announced plans to buy U.S. Treasury bonds in essentially unlimited amounts while providing emergency liquidity for money markets, Wall Street dealers and corporations. 

“The road ahead is highly uncertain,” Fed Governor Michelle Bowman said Thursday in a speech in Kansas.  

‘No easy way out’ for Powell

Many investors are betting on bitcoin as a hedge against the potential debasement of the U.S. dollar, but Fed officials say deflationary forces might be stronger because of an expected drop off in demand from consumers and households.

Analysts for Bank of America, the second-biggest U.S. bank, wrote earlier this week in a report that bond market traders expect the Fed to adopt a “major new policy framework aimed at better achieving its 2% target” for annual inflation. As of the last reading, the central bank’s preferred measure of consumer price increases registered just 0.9%, so the baseline expectation is the Fed would let inflation rise well above 2% so that the average over a long period of time gets closer to the target. 

Read more: Bitcoin Risks Deeper Drop if Dollar Rebounds

“Let us be optimistic and say it takes three years to create some inflation,” Matt Blom, head of sales and trading at the digital-asset firm Diginex, wrote Wednesday in an email. “We would need to drive it above 3.5% and maintain it there for years before we are able to use an average calculation.” 

It’s unclear what Fed scenario is already priced into the market, but Bank of America’s Athanasios Vamvakidis, a foreign-exchange analyst, wrote that there is “no easy way out” for Powell and his colleagues. 

“Without inflation eventually acting as a budget constraint, we see risks for recurring and worsening bubbles, with further divergence between Wall Street and Main Street,” Vamvakidis wrote. 

What Powell’s speech could say about the dollar’s future

Crypto traders will focus in the short term on what the Fed’s speech might mean for bitcoin prices, which have surged almost 60% in 2020, far exceeding this year’s 7.7% year-to-date gain in the Standard & Poor’s 500 Index of U.S. stocks. 

But the Fed’s actions could also have implications for ether, the native token of the Ethereum blockchain, where entrepreneurs are developing alternative currencies and semi-autonomous lending and trading networks that might one day replace the currency financial system. There’s also a fast-growing business in dollar-linked “stablecoins,” with the amount doubling this year to $13 billion.

Read more: Fed Reserve Analysts Say Common Digital Currency Distinction ‘Problematic’

“So much has changed,” said Joe DiPasquale, CEO of the cryptocurrency-focused hedge fund BitBull Capital. “There is this danger of the U.S. [dollar] in the future no longer being the world’s reserve currency. We are in a much worse position than we were in a year ago.”

Mati Greenspan, founder of the cryptocurrency and foreign-exchange analysis firm Quantum Economics, wrote this week that Powell’s return to Jackson Hole comes at a time when “people are just starting to ask questions about the intrinsic value of money.” 

“U.S. authorities have just taken on an inordinate amount of debt, more than they could possibly ever hope to pay back,” Greenspan wrote. “So the only viable option is to decrease the value of that debt by way of monetary debasement. It’s despicable and dangerous, but the only other option is austerity, which is too unpopular for any public servant to mention at this time.”

Disclosure

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.



Source link

RELATED POSTS

First a Hum and Then a Bang –Niagara Falls Residents Forced to Reckon With Crypto Mining

Bitcoin Returns Above $30K; Resistance at $35K

Tags: ChairDollarsFedFutureHintHoleJacksonPowellsSpeech
ShareTweetShare

Related Posts

First a Hum and Then a Bang –Niagara Falls Residents Forced to Reckon With Crypto Mining

First a Hum and Then a Bang –Niagara Falls Residents Forced to Reckon With Crypto Mining

by admin
May 20, 2022
0

Most residents near the Blockfusion site told CoinDesk they had heard the explosion but weren't too alarmed at the...

Bitcoin Returns Above $30K; Resistance at $35K

Bitcoin Returns Above $30K; Resistance at $35K

by admin
May 20, 2022
0

Lower support is seen at the 200-week moving average, which is currently at $21,954. A break below that level...

There Was No Terra ‘Attack’

There Was No Terra ‘Attack’

by admin
May 20, 2022
0

There’s a natural impulse to want to protect people who might not understand those risks. At the same time,...

Dai Creator Rune Christensen on Terra's Collapse

Dai Creator Rune Christensen on Terra's Collapse

by admin
May 20, 2022
0

The MakerDAO founder wasn’t in the mood to say “I told you so,” following Terra’s stablecoin collapse, on CoinDesk...

Terra’s LUNA Has Dropped 99.7% in Under a Week. That’s Good for UST

It’s Not Just LUNA. Terra’s DeFi Apps Have Hemorrhaged $28B

by admin
May 20, 2022
0

As widely reported, much of the lost value was on the lending protocol Anchor, which took the biggest hit,...

POPULAR NEWS

4 Cryptocurrency that Blow Bitcoin Out of the Water

4 Cryptocurrency that Blow Bitcoin Out of the Water

September 25, 2020
Memoriae – Next Generation of Decentralized Cloud Storage Based on Blockchain

Memoriae – Next Generation of Decentralized Cloud Storage Based on Blockchain

July 1, 2021
Apollo CBDC: The CBDC Platform that can Power Economies

Apollo CBDC: The CBDC Platform that can Power Economies

October 6, 2020
Stratus: The Most Feature Rich Social Media Network

Stratus: The Most Feature Rich Social Media Network

September 9, 2020
Binance Coin (BNB) erupts above $270 as the whole Smart Chain ecosystem soars

Binance Coin (BNB) erupts above $270 as the whole Smart Chain ecosystem soars

February 19, 2021

EDITOR'S PICK

Bitcoin Stabilizes Near $50K Support After Weekend Sell-Off

Bitcoin se estabiliza cerca del soporte de $50.000 tras la caída del fin de semana

December 6, 2021
New York Assembly passes bill to temporarily ban Bitcoin mining

New York Assembly passes bill to temporarily ban Bitcoin mining

April 27, 2022
Sino-Global Forms Venture to Develop New Bitcoin Mining Machine — CoinDesk

Sino-Global Forms Venture to Develop New Bitcoin Mining Machine — CoinDesk

October 5, 2021
Ninja Fantasy Trader Announces Its First Trading Contest of NFTraders or Samurais

Shumo, the world's most powerful Shib, is launching its token

March 26, 2022

About

We publish a comprehensive news feed covering all news relevant to the crypto user, covering main industry news, politics and regulation as well as consumer-level “news you can use” (practical stuff), including handy DIY tips, links to useful tools, unbiased reviews and opinions revolving around cryptocurrency. Simple logic and real-world examples are preferred before technical jargon and personal rants.

Follow us

Categories

  • Altcoin
  • Bitcoin
  • Blockchain
  • Cryptocurrency
  • Ethereum
  • Litecoin
  • Market
  • Press Release
  • Regulation
  • Uncategorized

Recent Posts

  • A Noble Launch Gets Underway
  • First a Hum and Then a Bang –Niagara Falls Residents Forced to Reckon With Crypto Mining
  • Grow Marketing Company Supplies Entrepreneurs with Practical Business Information
  • Bitcoin Returns Above $30K; Resistance at $35K
  • About Us
  • Privacy Policy
  • Contact Us

© 2020 cryptomustar.com

No Result
View All Result
  • Home
  • Altcoin
  • Bitcoin
  • Ethereum
  • Litecoin
  • Cryptocurrency
  • Blockchain
  • Regulation
  • Market
  • Prices
  • ICO

© 2020 cryptomustar.com

  • YAM v2YAM v2(YAMV2)$4.70-1.41%
  • yfBetayfBeta(YFBETA)$4.27-0.10%
  • IDLEIDLE(IDLE)$1.44-12.39%
  • WPP TokenWPP Token(WPP)$0.006826-3.49%
  • DSLA ProtocolDSLA Protocol(DSLA)$0.003681-6.85%
  • lympoLympo(LYM)$0.004392-4.43%
  • Werewolf CoinWerewolf Coin(WWC)$0.098082-2.58%
  • PolkaBridgePolkaBridge(PBR)$0.439784-6.92%
  • Dev ProtocolDev Protocol(DEV)$1.76-16.14%
  • EvidenZEvidenZ(BCDT)$0.122949-3.85%