Bitcoin (BTC) and other bulls won’t benefit from a drastic change in US inflation policy in 2023, according to one analyst.
and twitter thread On December 20, Jim Bianco, head of institutional investor research firm Bianco Research, said the Fed would not “turn around” on raising rates next year.
Bianco: Japan YCC move ‘important for all markets’
Analysts have become increasingly bearish on the outlook for risk assets this week in light of the Bank of Japan’s (BoJ) unexpected yield curve control (YCC) tweak.
As Cointelegraph reported, the move hit the U.S. dollar directly, with Wall Street in sight, and stock futures trending down in unison at the time of writing.
For Bianco, the fact that the BOJ was now following the Fed in tightening policy to prevent inflation meant the Fed was unlikely to loosen its own policy.
“Also in Japan! Remember why the Fed will pivot anytime in 2023 when it is hiking towards policy change now due to inflation.” Part of one post read.
“The answer is don’t. You can forget the pivot.”
The actual concrete consequences of Japan’s decision may only be felt later, Bianco continued.As bond yields rise, Japan needs to draw capital home and away from the US
“The dollar is crushing against the yen (or the yen is surging against the dollar). Japan is yielding again. That should get the money back to Japan,” he wrote. .
A return to lower interest rates is a key contingency priced into the non-cryptocurrency market that will no longer pay off, Binanco said. BTC/USD has already fallen nearly 80% in just over a year in step with the Fed’s quantitative tightening (QT), but the pain may not be over yet.
“Powell is a hawk,” he concludes, referring to Fed Chairman Jerome Powell’s speech last week in which he tried to steer markets away from predicting policy easing.
“ECB President Regardo (Madame Lagarde) is now talking hawkish words. We may need to reconsider.”
Fidelity executives warn of ‘precarious’ year
Other perspectives sought to offer a more hopeful view of the year ahead while avoiding implied bullish language.
Related: ‘Downward Wave’ in Every Market? 5 Things You Need to Know About Bitcoin This Week
Julian Timmer, director of global macro at Fidelity Investments, predicts a “flat” trading environment for equities in 2023.
“My sense is that 2023 will be a flat volatile market, retesting 2022 lows one more time, but not necessarily worse. murmured December 19th.
“In any case, I don’t think we’re close to another cyclical bull market just yet.”
In a subsequent comment, Timmer said he believed the long-term bull market had been going on since 2009, but added, “The question is whether the long-term bull market is still alive.”
The views, thoughts and opinions expressed herein are those of the author only and do not necessarily reflect or represent the views or opinions of Cointelegraph.
