Seeds of Wisdom RV and Economic Updates Friday Afternoon 8-23-24
Good Afternoon Dinar Recaps,
Fed Chair Jerome Powell: Time Has Come for Policy to Adjust
Bitcoin rose in the immediate aftermath of his remarks at the Fed's Jackson Hole conference.
As expected, Jerome Powell indicated that a rate cut is coming in September
Bitcoin and traditional markets at least initially have moved sharply higher
Investors will now focus on whether the initial rate cut will be 25 or 50 basis points
After a long wait, central bank rates in the U.S. now appear certain to be headed lower in September after Jerome Powell said the "time has come" for an easing in monetary policy.
"My confidence has grown that inflation is on a sustainable path back to 2 percent," said Powell in his keynote address at the Kansas City Fed Jackson Hole Symposium.
"The labor market has cooled considerably from its formerly overheated state," he continued. "We do not seek or welcome further cooling in labor market conditions."
"The time has come for policy to adjust," added Powell. "The direction of travel is clear, and the timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks."
Though markets fully expected Powell to indicate that a rate cut was coming at the Fed's September meeting, the tone of his remarks likely leaned a bit more dovish than anticipated. In the minutes following the release of his speech, bitcoin (BTC) added more than 1% to $61,900.
A check of traditional markets finds big gains as well: The Nasdaq is higher by 1.7%, while the S&P 500 is up 1.2% and gold has climbed 1%. The 10-year Treasury yield has dipped five basis points to 3.80% and the U.S. dollar index has fallen 0.6%.
After years of near-zero Fed policy rates, the U.S. central bank in early 2022 embarked on a long series of rate hikes, eventually taking its fed funds rate up to the 5.25%-5.50% range in 2023.
Since, it's been a waiting game, with the Fed wanting to see crystal clear signs that inflation was meaningfully slowing to its 2% target before moving to begin trimming rates. That day surely has now arrived.
The question going forward will be if the Fed cuts the fed funds rate by 25 or 50 basis points at its mid-September meeting. Markets continue to lean towards 25 basis points, but the chances of a 50 basis point move have grown to 32.5% currently from 24% one day ago, according to CME FedWatch. There remain some key economic reports between now and that September decision – August's employment and inflation numbers among them – which should be key to Fed's ultimate decision.
@ Newshounds News™
Souece: CoinDesk
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U.S. sanctions over 400 entities and individuals for aiding Russia’s war effort, including Chinese firms
U.S. officials have repeatedly warned China about its support for Russia’s defense industry and have issued numerous sanctions aimed at restricting Moscow’s access to critical technologies.
The latest measures target companies in China involved in shipping machine tools and microelectronics to Russia, as highlighted in a State Department fact sheet covering sanctions against 190 entities. The Treasury Department imposed additional sanctions as part of this broader effort.
Sanctions were also aimed at stifling Russia’s energy sector, with actions taken against firms in Turkey, the United Arab Emirates (UAE), and Central Asian nations believed to be assisting Russia in evading existing sanctions.
“Today’s actions hit Russia where it hurts – degrading its ability to generate revenue through its energy projects and disrupting its acquisition of material to supply its war machine,” said Aaron Forsberg, director for economic sanctions policy at the State Department.
The sanctions come as the war in Ukraine escalates, following Ukraine’s August 6 military offensive in Russia’s Kursk region. Despite some recent successes, Ukrainian forces continue to face pressure from advancing Russian troops in eastern Ukraine.
Among those sanctioned is the import-export division of China’s Dalian Machine Tool Group, which allegedly supplied $4 million worth of dual-use items to Russian firms. China denies providing weaponry to Russia but defends its trade relationship with Moscow as normal.
Washington's measures also target companies supplying components for Orlan drones, used by Russia in Ukraine, and firms involved in energy projects like the $21 billion Arctic LNG 2 initiative.
This project has already been hit by previous Western sanctions, limiting its access to ice-class tankers. Additional sanctions were imposed on UAE-based White Fox Ship Management, which the U.S. says acquired four tankers to transport liquefied natural gas (LNG).
@ Newshounds News™
Souece: Badlands Media
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Tether shuns blockchain launch, cites market concerns
Tether’s decision to avoid launching its blockchain stems from the crowded market and strategic alignment with existing platforms.
Tether, the issuer of the world’s largest stablecoin, USDT, has calculated to forgo its own blockchain launch, citing market saturation and strategic concerns.
According to an interview with Bloomberg News, the company’s CEO, Paolo Ardoino, explained that the stance comes from analyzing the blockchain space and a crowded market.
Ardoino stated that the firm launching a blockchain might not be the “right move” since “very good blockchains” are already available to the public.
Market saturation
In the interview, Ardoino noted that blockchains are becoming increasingly commoditized, with many offering similar functionality to users.
As such, he explained that the firm is satisfied with the remaining blockchain as “agnostic” as long as USDT trading retains peak sustainability and security using blockchains as “transport layers.”
In a YouTube interview with Unlock Blockchain, Ardoino explained that Tether is “a product market fit.”
“We created the entire stablecoin market in 2014. There was no stablecoin before us."
Tether Aptos expansion
On Aug. 19, Tether launched USDT on the Aptos blockchain to reduce transaction costs and improve global digital currency accessibility.
With the new integration, the company aims to leverage Aptos’ speed and scalability to provide users with gas fees that cost “only a fraction of a penny.”
The announcement by Tether follows the Aptos blockchain, witnessing significant growth and a “record-breaking” 157 million transactions in a single day in May.
Launch of dirham stablecoin
On Aug. 21, Tether partnered with the United Arab Emirates’ Phoenix Group and Green Acorn Investments to launch a dirham-backed stablecoin.
The new stablecoin aims to digitally represent the dirham currency, “fully backed by liquid UAE-based reserves” while adhering to Tether’s “transparent and robust standards.”
This expansion into the UAE market is expected to offer users a cost-effective method for accessing “the benefits of the AED.”
@ Newshounds News™
Source: CoinTelegraph
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