Analysts say a ferocious Fed rate hike could spur a ‘bond market flash crash’ or ‘blow-up of the Treasury Department’
With the US economy struggling with rampant inflation, investors are eagerly waiting for the US Federal Reserve to announce the next Federal Fund rate hike next month. Harris Kupperman, founder of hedge fund Praetorian Capital, thinks it’s very likely that the Fed’s rate hike onslaught will “blow the Treasury.” Moreover, amid pessimistic macro trends, Jessica Walker, chief marketing officer at Fluid Finance, says the economic downturn and fiat currency weakness reveal the true benefits of cryptocurrencies. .
Praetorian’s Harris Kupperman says barrage of Fed rate hikes could ‘blow the Treasury’
This week, Bitcoin.com News reported on a number of analysts who believe the US Central Bank will raise the Federal Funds Rate (FFR) by three-quarters of a percentage point at its November meeting. On Oct. 18, Harris Kupperman, founder of hedge fund Praetorian Capital, said he believed the Fed was now stuck and, despite his strong rhetoric, believed the Fed needed to turn. released a report claiming that “an avalanche is moving”. Increase FFR.
Kupperman also made his case on the podcast “Forward Guidance”, detailing that the Fed would really struggle when oil surged again. Founder of Praetorian Capital and head of Adventures in Capitalism The adventurer argued on his podcast that the Fed needs to turn around and accept high inflation as a reality today. In a report released Oct. 18, Kupperman noted that continued rate hikes with a target of 4.6% or more could lead to “blowing up the Treasury Department.”
J. Kim argued that the “financial weapon of mass destruction of 2008” still exists and that if the Fed were to run amok, the US central bank could “bring illiquidity to the world’s largest bond market.” increase.
Additionally, J. Kim of the skwealthacademy substack explains in a recent blog post that weapons of mass destruction forgotten in 2008 are still a problem in 2022. Kim also believes that a flash crash in the Treasury market is inevitable in this market environment. Talking about financial weapons of mass destruction, Kim details how the perception that the world’s derivatives have declined significantly since 2008 is an illusion.
Kim’s article adds:
Bankers reduce their positions in these highly risky products that could collapse like a matrix of dominoes if one major bank were to default in any of these major categories of derivatives. If you think you did, you would be wrong.
Kim’s blog post explains how the US Central Bank could go rogue and wreak havoc on bond markets, similar to Kupperman’s position.
“While the ECB appears to have kept its promise not to collapse this important derivatives market, the US Central Bank has not,” said Kim’s blog post. “If the Federal Reserve really goes rogue by continuing to boost the strength of the U.S. dollar against all other major global fiat currencies, this could lead to illiquidity in the world’s largest bond market, the U.S. Treasury. Not only could it lead to financial risks, but it could also lead to large-scale defaults, as does the U.S. dollar-denominated interest rate derivatives market.”
Fluid Finance CMO Says Fiat Currency Failure And Dark Economy Highlights Benefits Of Crypto Diversification And Decentralization
Meanwhile, Fluid Finance chief marketing officer Jessica Walker told Kitco News anchor and producer David Lin of Kitco that options such as diversification and cryptocurrencies shine amid these macro trends. said. “People are very concerned about the security of their own fiat currencies and their own coins right now,” Walker told Lin at the Future Blockchain Summit in Dubai. “Being able to diversify and have alternatives to fiat currencies is more important than ever in a time of great geopolitical uncertainty.”
Walker also spoke about Canadian truck drivers’ protests against vaccine mandates earlier this year.At the time, fundraising platform Gofundme stopped Ottawa’s Freedom Convoy from receiving donations. At the time, banks froze bank accounts and Canadian Prime Minister Justin Trudeau invoked emergency laws to deal with the protests. “It was a pretty scary time. I was more of an advocate of decentralization,” Walker said on Friday. ,” said a Fluid Finance executive.
In terms of diversification, Walker believes in Bitcoin, Ethereum, and several other blockchain projects. “I’ve been doing dollar-cost averaging on Bitcoin, Ethereum, and then looking at projects that I really believe in,” Walker told Kitco’s host on Friday.
What are your thoughts on Harris Kupperman and J. Kim’s take on the current volatile US Treasury market amidst the aggressive US central bank? What are your thoughts on Fluid Finance executive Jessica Walker’s diversification strategy? Let us know what you think about this in the comments section below.
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Analysts say a ferocious Fed rate hike could spur a ‘bond market flash crash’ or ‘blow-up of the Treasury Department’
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