Fearing a Hawkish Fed: Economists Focus on Upcoming FOMC Meeting as Global Market Rout Slows

By Jamie Redman

Global markets have been feeling the pressure of fear and uncertainty, as the upcoming Federal Open Market Committee (FOMC) plans to make a decision on Wednesday concerning changing the current monetary easing policy and raising the benchmark interest rate. Economists and market analysts fear the hawkish Federal Reserve will tighten markets too fast after the central bank expanded the U.S. monetary supply like never before in history.
Allianz Chief Economic Adviser: ‘Fed Maintained Its Transitory Inflation Narrative for Way Too Long’
All eyes are on the Federal Reserve this week and the conversation has turned into speculation about the upcoming FOMC meeting. The committee will make a decision on Wednesday at 2 p.m. (EST) which will be followed by a press conference from the central bank chairman Jerome Powell. Last week global stocks were roiled and dropped significantly, while crypto markets followed the same path as the crypto economy shed billions in value. Precious metals like gold and silver managed to stave off the market rout, and both metals are up a few percentages over the last 30 days.
The Federal Open Market Committee (FOMC) plans to meet on Wednesday, and market participants are expecting a shift in monetary policy. Federal Reserve chair Jerome Powell (pictured above) will hold a press conference after the FOMC meeting at 2:30 p.m. (EST) on January 26.
As the U.S. central bank has hinted at tightening quantitive easing (QE) and raising interest rates, the Fed’s critics believe the pivot is too fast. Mohamed El-Erian, the chief economic adviser at the financial services company Allianz, is one of those critics. “The first policy mistake was completely misunderstanding inflation,” El-Erian said on Tuesday. He added that the Fed’s Board of Governors “maintained its transitory inflation narrative for 2021 way too long, missing window after window to slowly ease its foot off the stimulus accelerator.”

FOMC tomorrow so probably range today till then
— TraderSZ (@trader1sz) January 25, 2022

Now that the Fed seems to be moving in the direction of tightening monetary easing quickly, traders and analysts are fearful about creating new positions in the market. “I would be very [reluctant] to look at getting in or adding to positions to anything until we hear from an increasingly hawkish Fed on Wednesday,” the managing director at Strategic Funds, Marc LoPresti, told the press on Monday.
Market Participants Try to Predict the Fed’s Monetary Tightening Timeline
Meanwhile, as the FOMC meeting has been trending on social media and forums, analysts have been trying to predict the decision ahead of time.

The Fed released some of its 2023 FOMC dates. So, I was able to extend this table.
Here is the latest pic.twitter.com/6qwXj1AEVm
— Jim Bianco biancoresearch.eth (@biancoresearch) January 24, 2022

The prediction markets operated by kalshi.com are also trying to forecast when the U.S. central bank will raise the benchmark rate. 98% of those leveraging kalshi.com’s Fed prediction market say the Fed will raise the rate above 0.25% in July.

The least-chosen month was December 2022 and 84% chose that specific date. The financial analyst on Twitter that goes by the name “Mac10,” explained that market bulls need to break their strength.
“The way I see is that either the market crashes between now and FOMC, forcing the Fed to reverse,” Mac10 wrote. “Or, the Fed comes in hawkish and the market crashes. I don’t see a Goldilocks scenario. Bulls, something must break for the Fed to reverse. That something is you.”

UBS Executive: ‘This Week’s Fed Meeting Is Likely to Underscore the Fed’s Shift in Policy Priorities’
Mark Haefele, CIO of Global Wealth Management at UBS, thinks the upcoming Fed meeting will “underscore” the Fed’s current line of thinking.
“For much of the past decade, market volatility was calmed by the notion that the Federal Reserve and other global central banks stood ready to step in to support the economy in the event of weakness, exogenous shocks, or an unexpected tightening in global financial conditions,” Haefele said in a statement on Tuesday. “Today, with inflation still elevated, that support feels less certain, and this week’s Fed meeting is likely to underscore the Fed’s shift in policy priorities away from supporting growth and toward fighting inflation,” Haefele added.

If the Fed doesn’t reverse course during the FOMC meeting on Wednesday, I think everything will fall further than most expect.
Once they inevitably reverse, #Bitcoin bounces fast in a BIG way📈.
— Joe Burnett (🔑)³ (@IIICapital) January 24, 2022

Metrics recorded 24 hours before the FOMC meeting show that stock markets saw some relief at the end of the day on Monday. Tech stocks, Nasdaq, NYSE, and the Dow Jones ended the day in green and cryptocurrency markets saw a similar pattern. On Tuesday morning, the crypto economy has gained 8.5% to $1.7 trillion in the last 24 hours with leading crypto assets like bitcoin (BTC) and ethereum (ETH) jumping 7-10% in value over the last day.

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Allianz, Allianz Chief Economic Adviser, Bitcoin, BTC, CIO of Global Wealth Management, Crypto, dow jones, economics, Economy, ETH, Ethereum, FOMC Meeting, gold, hawkish Fed, jerome powell, kalshi.com, Marc LoPresti, Mark Haefele, Mohamed El-Erian, nasdaq, NYSE, Precious Metals, Prediction markets, silver, Strategic Funds, tech stocks, UBS, US economy, Wednesday FOMC meeting
What do you think about the upcoming FOMC meeting and the possibility of the Fed tightening monetary easing too fast? Let us know what you think about this subject in the comments section below.

Jamie Redman

Jamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 5,000 articles for Bitcoin.com News about the disruptive protocols emerging today.

Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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US Still Dominates Bitcoin Mining Sector, 30-Day Stats Show Foundry USA Takes Top Pool Position

By Jamie Redman

Since the Cambridge Bitcoin Electricity Consumption Index (CBECI) project updated its mining map in mid-July, the United States has continued to dominate in terms of the amount of hashpower worldwide. Moreover, data shows that Foundry USA has managed to command the top pool position with 755 bitcoin block rewards mined during the last 30 days.
The United States Commands a Large Concentration of Bitcoin Miners, 66 Exahash Recorded in the US on January 24
According to chainbulletin.com’s mining map, there is a large concentration of the Bitcoin network’s hashrate located in the United States. At the time of writing, data shows that 66.22 exahash per second (EH/s) or 35.4% of the global hashrate resides in the U.S., while 17.87 EH/s or 9.55% is located in Canada. Between Canada and the United States, the countries command 44.95% of the global hashrate.
Chainbulletin.com’s mining map: U.S. metrics on January 24, 2022.
Pool operators located in the U.S. include Binance USA, Btc.com, SBI Crypto US, Viabtc US, Poolin US, Slushpool US, Antpool US, F2pool USA, and Foundry USA. The 30-day statistics showing hashrate distribution show that the aforementioned pools command the top eight largest mining pools worldwide. Metrics indicate that Foundry USA found 755 blocks and captured the top pool position last month with 16.87% of the hashrate.
30 day pool distribution metrics on January 24, 2022.
Following Foundry USA’s 30-day stats was Antpool’s 659 blocks found or 14.72% of the BTC hashrate. F2pool found the same amount of blocks as Antpool last month and captured 14.72% of the network hashrate as well. Binance Pool came in fourth this past month with 11.55% of the hashrate or 517 blocks found. Lastly, the fifth-largest mining pool during the last 30 days was Poolin as it captured 511 block rewards or 11.42% of the global hashrate.

Bitcoin Mining Operations Are Located in Florida, New Jersey, California, Virginia, Ohio, Colorado, Washington, Texas
Chainbulletin’s mining map shows that F2pool has an operation in Florida and California, Btc.com has operations in Virginia, Colorado, and Washington. SBI Crypto US is located in Oregon and Foundry USA has a pool located in Ohio. Slushpool US has operations in Colorado, California, and New Jersey, while Antpool has operations in Texas. Furthermore, lots of smaller American bitcoin mining facilities are pooled together with larger U.S. mining pools.
Chainbulletin.com’s mining map: Worldwide metrics on January 24, 2022.
Many of these companies have bitcoin mining operations overseas as well. For instance, Huobi, Btc.com, and SBI Crypto have operations in Germany. Slushpool and Antpool have operations in Amsterdam and Slushpool and SBI are also operating in Japan. Okex has a bitcoin mining operation in Hong Kong, and Slushpool and Pooling have facilities in Singapore. Slushpool also has a residence in Russia according to Chainbulletin’s mining map data.
Despite the increased mining difficulty last week and the significant drop in BTC’s price, bitcoin miners worldwide have managed to keep the tempo high. At the time of writing, the global hashrate is running at 194 exahash per second (EH/s) in terms of computational power. 24-hour metrics show that Foundry USA has an even larger share of hashrate with 22.76% of today’s global hashrate or 42.42 EH/s.

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America, Amsterdam, Antpool, Binance Pool, Bitcoin, Bitcoin (BTC), Bitcoin mining, BTC, BTC Mining, BTC.com, california, Cambridge Bitcoin Electricity Consumption Index, Canada, CBECI, chainbulletin.com, colorado, Europe, F2Pool, Florida, Foundry, Foundry USA, Germany, Hong Kong, Huobi, Japan, New Jersey, North America, Ohio, Poolin, Sbi Crypto, Slushpool, Texas, United States, US Miners, Virginia, Washington
What do you think about the concentration of bitcoin miners located in the United States today? Let us know what you think about this subject in the comments section below.

Jamie Redman

Jamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 5,000 articles for Bitcoin.com News about the disruptive protocols emerging today.

Image Credits: Shutterstock, Pixabay, Wiki Commons

More Popular NewsIn Case You Missed It