FOMC Meeting
What happened at the FOMC meeting, what Powell told in the press conference and Twitter's plans for the future – all of this in today's blog.
Let's start with the FOMC since it's more important and has a bigger impact on the market.
The first and most important thing was the new federal reserve rate. As expected, it was raised by 25 basis points to 4.5-4.75. The crypto and stock markets were volatile following the report.
All eyes were on Jerome Powell and what he will tell the world. He started his statement by reassuring the FED still wants to contract its balance sheet and achieve the goal of maximum employment and stable prices.
Powell also talked about the housing sector and that the demand is currently down thus disinflationary process has already started. The same can be seen in the CPI data, now we are waiting for the same to happen in Core PCE (prices excluding food and energy) numbers.
How's the labor market holding up? Powell told us that labor demand is still greater than the supply. He wants to bring this ratio closer to equilibrium, it currently sits at ≈1.9.
In the Q&A session, he answered Nick T.'s question and revealed the FED is talking about a potential hike pause. He didn't expand on that but just added that the new FOMC meeting minutes report will be out in March.
His statement was pretty much the same as it was in December except when asked about JOLTS he said it's not as important anymore and that the FED is evaluating economic conditions based on the aggregate economic data.
Twitter (crypto) payment system
In November Twitter applied with US Treasury to process payments because of necessity for any business that wants to be involved with money transfers, currency and exchanges. Musk's decision echoes his past at PayPal.
At first payments tool will only support fiat currencies but Elon wants to build it with support for crypto as well in the future. He teased this idea for quite some time now and a step closer to Musk's vision of creating X, the everything app.
A cryptocurrency that would be used could be »Twitter Coin« or as Elon has teased already DogeCoin. Thus every time the payment system is mentioned crypto degens are aping into DogeCoin and it can be seen as a »straight up« price action.
Also rumors of a Twitter wallet, that would support withdrawals and deposits, emerged but this is still unconfirmed.
We will have to wait and see first if the »Twitter Payments LLC« licensing process will be completed and when. Only then Elon can expand on his ideas and bring them to reality.
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