The U.S. Federal Reserve’s campaign against inflation might not be finished until you’ve lost money on bitcoin (BTC).
The reason why goes back to the basics of central banking. The Fed does what it does with monetary policy (these days, raising interest rates) and that filters through the economy by impacting, among other things, how much key assets cost – “financial conditions,” in central bank jargon.
For most of this year, Fed policy makers have been sanguine toward markets like stocks, preparing traders in advance (called “forward guidance”) for upcoming changes to monetary policy. But that seems to be in the past. In July, Fed Chair Jerome Powell announced that central bankers would stop practicing forward guidance.
“It’s clear the Fed wants to see tighter financial conditions, which include lower stock prices,” Brian Overby, senior markets strategist at Ally, wrote in a note.
And that probably means crypto, too, because crypto prices have been strongly correlated with...
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