Macro, Fed Taper, and CPI - Fed Watch #57 - Bitcoin Magazine

In this episode of Bitcoin Magazine’s “Fed Watch” podcast, we, your hosts Christian Keroles and Ansel Lindner catch listeners up on the global macroeconomic situation, discuss some financial current events, Fed taper, and of course dive into the current state of Bitcoin.

The first topic is a trip around the world starting in China. The CCP surprised the market recently with a Reserve Requirement Ratio (RRR) cut. From Reuters, “Late on Friday, the People’s Bank of China (PBOC) said it will cut the amount of cash that banks must hold as reserves, releasing around 1 trillion yuan ($154.19 billion) in long-term liquidity to underpin a post-COVID economic recovery that is starting to lose momentum.” This is being seen by many as a warning sign of a slowing Chinese recovery.

Next, we cover Germany’s slowdown in Purchasing Managers Index (PMI) and factory orders. While the headline numbers look just okay, factory orders from outside the Euro area fell by 9.3% according to Germany’s Federal Statistics office destatis! Germany is a bellwether for the global economy and that print doesn’t sound like global recovery.

Last on our world tour, we discuss Japan’s Japanese Government Bonds (JGB) yields. Earlier in the year, Japanese yields were taking off signaling growth and health of the economy, but since February have done an about-face and are again approaching zero. So both important economies, Germany and Japan, are flashing red slowdown. Jeff Snider from Alhambra Partners had a great write up on both Germany and Japan.

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Timestamps:

0:00 - 0:58 Intro
0:58 - 5:10 The state of the global economy
5:10 - 7:01 Bitcoin is the least risky asset in today's global economy
7:01 - 9:43 The Fed's response to the inflation narrative
9:43 - 11:20 How will the market react to the Fed tapering in MBS?
11:20 - 13:11 The significance of narratives
13:11 - 18:03 Wells Fargo closing personal lines of credit
18:03 - 20:04 Banks limiting their exposure to a potentially slowing economy
20:04 - 25:34 The current CPI numbers
25:34 - 28:48 The state of the bitcoin market
28:48 - 31:14 GBTC unlock and the mining hash rate
31:14 - 32:50 Ansel's article on El Salvador

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