Crypto currency When we threw the headline of April 9 in its markets, it was just yesterday evening. At the point we have reached, 104 %of the tariff came into play and China announced an additional 50 percent tax without delay. Moreover, he launched more US companies. The Treasury Minister says you will pay this bitter bill when the article is prepared. So what’s going on in the economy?
JPMorgan and Treasury Minister statements
US Treasury Minister For 40 years, Wall Street has been enriched and now he said, “Main Street,” he said for the next 4 years. The decline in stock markets and the losses experienced do not even care. As a matter of fact, Trump closed his ears. Now, while Japan and Canada are getting close, the EU says it can improve relations with China. The destructive stance of the United States can push countries to an alliance outside the USA.
Jpmorgan Chase CEO Jamie Dimon just said in a statement that the possible result of customs duties was a recession. He told the Fed to go to interest rate cuts, and now Apollo CEO Rowan says he expects the Fed to come into play.
“Markets are not always right, but sometimes they are right.
I think they are right this time because they pricit the uncertainty at the macro level and the uncertainty at the real company level, and then they see how it affects consumer sensitivity.
I hear you talk about recession. I have been waiting for more credit problems for a long time. I don’t see a default yet, but I’m waiting.
Probably recession is a possible result. “
Japan and G7 President Canada agreed to cooperate in close cooperation to maintain stability in global markets and financial system.
What happens in the economy?
Current conditions are short and the Fed is still in the middle maturity scenario means more for crypto currencies. Within only 3 days, 10 -year bond return increases by 60 basis points S&P 500 -Fell 8%. This refers to the largest 3 -day increase since 1982 and one of the biggest decompositions in history. Basis Trade is broken.
The Kobeissi Letter wrote;
“More specifically, something broke down last night. The 10 -year bond return between 7 and 12 in the morning increased by +25 basis points. Even when the stock market term collapsed, the 30 -year bond return increased over 5.00 %. This is an extremely extraordinary price movement, something is not going well.
This increased the return of 10Y bonds over 60+ BPS of the levels when the “Fed Pivot” started in September 2024. In a market that pricts recession, bond prices should rise and return on returns. In one of the fastest movements of the last decade, we see the opposite. ”
Basis Trade Hedge is a strategy used by hedge funds to “arbitraj” the small gaps between cash treasure bonds and futures process prices. We remember this definition from the CME BTC Basis Trade deterioration. In those days, the strategy that was broken allowed hedge funds to sell BTC. For BTC, this problem meant billions of dollars of ETF output and decrease. A few billion dollars of position was closed and the problem was overcome in those days. Is this problem for a few billion dollars for the US? Of course no.
“The current estimates show that Basis Trade is very large and is around $ 800 billion.
The key point here is that these positions have high leveraged long positions. When these leveled positions are resolved, one must absorb the external shock effects.
In the short term, these positions are absorbed by intermediary institutions. Base trade of $ 800 billion reflects ~ 40%of the 2 trillion dollars available in the main intermediary institutions. The problem is that the intermediary institutions themselves are limited to capital and they cannot meet such a quick movement. ”
We are not talking about a valuation of $ 800 billion, we are talking about cash of $ 800 billion. The FED inevitably has to intervene in interest rates. If it is too late to use interest rates for balancing, interest rate cuts will not be sufficient alone and will go to the financial expansion quickly. At the time of the article, the expectation of interest rate cuts in May was based on 60 %.
The explanations from the Fed are important. And crypto- We can see much larger volatility in the short term. This volatility probably becomes a decrease, because it seems to be crazy for the US president and staff. Bessent just said;
“Spain’s interpretation of further adaptation to China is ‘cutting off your own throat’.”
The EU also signaled this. If China loses its allies while the US loses its allies so strongly crypto currency There is no decrease in its markets. In the evening, the future Fed minutes can trigger the sales reaction of the markets as they are based on softer additional customs duties projection.
As a matter of fact, the seriousness of the situation has not been understood, and the Kashkari fire from the Fed in the following minutes continues to be ridiculous as he wrapped everything;
“The risk of not fixing inflation expectations seems to be significantly increased. Even if the economy and labor market is weak, the bar is higher for interest rate cut.
Responsibility Rejection: The information contained in this article does not contain investment advice. Investors should be aware that crypto currencies carry high volatility and thus risk and carry out their operations in line with their own research.
