The Next FED Rate and Banks

There's a lot of new in the crypto sector today but it mainly focuses from things outside of the crypto area and instead deals with governments and their pain in the butt moves.

Today we got news of a 25 point rate hike from the FED and while some people are saying this means that rate hikes are near the end the other part of me realizes this is a HUGE mistake but one the FED most likely was forced to do because of all the doomsday recently with banks.

I firmly believe the FED should have went for 50 points and even possibly 75 points.

Why?

Even though inflation numbers have been showing sighs on retreating that's only because of the actions the FED took 6-12 months ago which were very aggressive rate hikes of 50/75 points.

You see actions the FED takes today have a lag effect and you don't see the results of it all until 6 to 12 months later.

Because of this history has shown us that the FED and the people start to feel like inflation is coming under control and start to back off. Which is exactly what we are seeing happen right now. Times are hard, banks are being filtered out and those weak with poor foundations are being destroyed and taken over.

Because of that it feels like the FED is only increasing rates at a smaller than expected rate. While this seems all great in 6 months we will more than likely see hyperinflation return and return worse off than it was last time triggering an even deeper recession then the one we are currently in.

YES, we are in a recession as much as some of those higher ups want to say we are not.

We are also seeing people come back to crypto as they are realizing the issues in crypto where really the factor of fiat, governments and banking bad actors.

This same thing has repeated itself time and time again in the history of inflation and the FED and this backing off right now might seem promising to me spells doom and gloom in a few months unless the FED starts kicking in a higher rate next time.

At the moment we are currently sitting at the highest interest rate since just before the last crash in 2007 but this time we might very well be worse off. With world war going on, trade issues and other countries flexing their military might things look a little sketch right now.

A Deeper Dive

In 2022 alone we saw interest rates go from 0% from the lock down of covid days to 4.5% in a single year. Inflation scratching at 9% and still holding steady at roughly 6% more than three times the target rate of inflation.

However the flip side of being this aggressive with rate hikes is banks had most of their money tied up into things considered "safe" investments like bonds. However with the fast rate hikes these bonds are losing value and it's reported that banks are right now sitting on well over 620 billion dollars of unrealized losses.

It's expected that the FED will continue to increase this rate which should be happening in May and June. It's expected that both of these will be 25 points again of which then the FED will stop and monitor the inflation rate. That's when that slippery sloop kicks in and we should see inflation fire back to all new highs 6 months later. That would put us around December of this year or the start of the new year 2024 being a serious mess of which the economy wouldn't start bouncing back from until 2025 which is what many predict would be the next bull run for crypto.

However most likely those fed rates would not kick in and in fact the feds increases might be near done which could paint a very positive outlook for the stock market and crypto thus instead ushering in a new bull market early starting around October which is when we normally see these types or rallies happen.

Personally I'm leaning more and more towards a major bull market end of summer into December like when most crypto rallies take place. Based on that I only have a few more months to mega stack as much as possible and get ready for this next bull run. Of course that's all speculative guessing at this point.

What are you thoughts?

Posted Using LeoFinance ^Beta