BROADCASTS.com

Published: Feb. 3, 2023, 5:33 p.m.

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Hosts: Ansel Lindner and Christian Keroles

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(Find links below or, along with charts, at bitcoinandmarkets.com/fed130)

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In this episode, we dive into all the central bank policy announcements this week, focusing on the Federal Reserve and European Central Bank (ECB).

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To set the stage for analyzing central bank monetary policy discussion, we look at the several macro charts, including bitcoin, the S&P 500, the dollar index (DXY), and US Treasury yields.

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The Federal Reserve raised its Fed Funds target range to 4.50% to 4.75%, emphasizing stable prices, inflation fighting, and employment. To help take us through this announcement, we listen to a couple clips of Chairman Jerome Powell at the press conference following the Federal Open Market Committee (FOMC) meeting.

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Powell also signaled that more rate hikes are coming, using the term \\u201congoing increases\\u201d. It\\u2019s a fine line the Fed has to walk. Since they don\\u2019t do anything mechanical to set rates, the forward guidance and word choices make all the difference.

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After a long discussion about the Fed\\u2019s decision, we jump to the ECB\\u2019s latest monetary policy change.

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The ECB raised their policy rates by 50 bps, as expected. However, they did slightly shift their forward guidance more dovish, differing from the Fed\\u2019s choice to remain rhetorically more hawkish. Instead of confirming two more 50 bps hikes eluded to in past statements, the ECB confirmed only one more before reevaluating.

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They also introduced \\u201cClimate QE\\u201d as part of their balance sheet reduction strategy. Each month, they allow a certain number of securities to mature and roll-off their balance sheet, reinvesting the remainder into new securities including corporate bonds. They will now take into consideration companies\\u2019 ESG-type score, when deciding which corporate bonds to buy.

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Thanks for joining us. If you are reading this, hit the like and subscribe button!

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Find More and Follow

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Ansel Lindner On Twitter

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Christian Keroles On Twitter

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Watch this Episode: YouTube || \\xa0Rumble\\xa0

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• Slide deck
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• Federal Open Market Committee policy statement
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• Powell FOMC press conference video
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• ECB Policy Release
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• Powell got more dovish the longer he talked
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• Andreas Steno substack on BLS data
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