What did the Central Bank have to say?
Earlier today we talked about the big FOMC meeting taking place today and the announcement that the Fed Chairmain Powell would be releasing. What decisions were they going to make, how were they going to address rate hikes, what policy shifts would they be likely to strike a deal on…
If we take away anything from the entire event it is 2-fold.
1 – The Fed is going to aggressively accelerate the taper of their Bond buying which has been used to stabilize the market ever since the beginning of the Covid-19 pandemic.
2 – Three rate hikes expected in the year 2022.
Why is this good news? Why would the stopping of buying bonds be a good thing and why in the world would rate hikes be applauded? One Word:
Tapering off the bond purchases earlier than scheduled (June) tells the world that the economy is healthy enough to ditch the crutches. The rate hikes mean that business and banks are healthy enough to no longer warrant the band-aid from the Federal Reserve and therefore, normalcy can return to the economic market of America.
Was there a Market Reaction?
You better believe there was!
Everything moved in concert with each other as if it was the Philharmonic Orchestra playing Beethovens Symphony No. 9 in D Minor. If you don’t understand the musical reference simply look at the 8 charts in the picture above to see that everything moved at exactly 2PM – the minute Powell started delivering the announcement.
Below you can see Bitcoin on the M15 Chart. You can see that Bitcoin was actually trying to lead the way by about an hour. Prior to 1PM it was nothing more than chop and treading water until the announcement.
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