Fed Meeting Could Trigger ‘Bloodbath’ Across Risk Assets, Including Crypto
• A market strategist has warned of a “bloodbath” across risk assets, including crypto, in the run-up to the February 1 Federal Reserve meeting.
• The strategist believes that Fed Chair Jerome Powell will come out more forcefully and hawkish than expected, leading to a sharp sell-off in all risk assets.
• The analyst referred to statements from Powell in which he indicated that ‘overtightening’ is less of a risk for the economy than not doing enough to get inflation down to its target.
As the Federal Reserve prepares to meet on Wednesday, February 1, one market strategist has predicted a “bloodbath” across risk assets, including crypto, ahead of the meeting. According to the strategist, who goes by the Twitter username The Carter, Fed Chair Jerome Powell will come out in a more forceful and hawkish way than the market currently expects, leading to a sharp sell-off across all risk assets, including bitcoin (BTC) and most other digital assets.
The Carter defended his view by citing Powell’s transparency as a central bank leader. “He plays with a wide open hand,” the strategist wrote in a Twitter thread posted on Friday. Additionally, the analyst referred to earlier statements from Powell, where he indicated that ‘overtightening’ is less of a risk for the economy than not doing enough to get inflation down to its target. “We can support economic activity strongly if that happens,” Powell was quoted as saying.
The strategist believes that this scenario could bring about a “bloodbath” in risk assets, including the crypto market. If the Fed Chair’s statements come out more forcefully and hawkish than expected, it would lead to a sharp sell-off in all risk assets, including digital currencies.
The Fed meeting on February 1 has already been identified as a possible turning point in the global markets, and the strategist believes that this could be the moment when the markets turn bearish. The Fed Chair’s statement could be the catalyst for a sharp sell-off across risk assets, and the crypto market could be particularly vulnerable.
The markets have been on a bull run for the past few months, and the strategist believes that the current optimism could be misplaced. The Fed meeting could be the moment when the markets turn bearish, leading to a “bloodbath” across risk assets.
The markets will be watching closely to see how the Fed Chair responds to the current economic situation. If Powell comes out more hawkish than expected, it could be the trigger for a sharp sell-off in risk assets, including crypto. Investors should be prepared for the possibility of a “bloodbath” in the markets as the Fed meeting approaches.