Fed to shock investors? Market preps for Fed Funds Rate decision at 2pm ET

Moment of truth this afternoon - we have The US Federal Reserve’s board of shadowy bankers announcing their Federal Funds Rate dictate at 2:00 pm ET.

Consensus estimate has the Fed hiking by 0.25%, with outlier outcomes skewed to the dovish side - leaving rates unchanged.

This morning Canada reported a February y/y inflation figure at 5.2% vs 5.4% estimated - potentially another indicator that inflation is cooling faster globally than was expected - giving the the Fed additional ammo to pause rates altogether. I expect 0.25% but think a total pause is more likely than is being priced in.

That’s in-line with my broad opinion that money printer is about to go brrr.

Here’s what you should know headed into Tuesday:

• 0.50% Hike Would Be Dramatic Policy Error

• US Housing Saw Surprising Activity in Feb

• Bitcoin & Ether on the move

WHAT WE OWN

$BTC, $ETH, $NVDA, $AAPL, $COIN, $XOM, $TSLA, $MSFT, $AMZN

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0.50% Hike Would Be Dramatic Error

• Small banks expected to tighten lending rules given recent stress, slowing down economy

• Commodity prices have slumped, with oil leading the charge (-42% since June 2022 high, indicating costs and demand have cooled, and the interest rate hikes may have actually helped

• Small banks are in trouble because of high interest rates and further aggressive increases at a fragile moment could lead to more contagion

  Zerohedge via Bloomberg

US Housing Strong

• Sales of previously owned homes increased 14.5% in February vs January, putting sales at an annualized rate of 4.58 million units.

• This was the first monthly gain in 12 months and the largest increase since July 2020.

• Sales were still 22.6% lower than February of last year.

• Median home prices fell 0.2% from February 2022 to $363,000, the first decline in 131 consecutive months.

• Higher mortgage rates since last summer have cooled home prices, but homes on the more affordable end of the market are selling.

• Inventory levels are still at historic lows, with just 980,000 homes for sale at the end of February.

  CNBC

Bitcoin & Ether on the move

• Cryptocurrency prices remain strong, as Bitcoin climbs back above $28k after a recent dip.

• Ether is also on the rise, up 2.4% to $1,800.

• With a roughly 17% chance of no rate hike, there’s a realistic chance of a complete reversal in the coming months as we’ve seen peak rates.

• While some attribute the recent crypto rally to a lack of confidence in traditional institutions, others see inflation and Fed policy as the real driving force behind Bitcoin's price.

• BTIG's Jonathan Krinsky warns that Bitcoin may be showing signs of "upside exhaustion" and faces resistance in the $28k-30k range.

• Regardless, Bitcoin is up 21% for the month and a whopping 70% for the year so far.

  CNBC

TWEET OF THE DAY

Messari founder paraphrasing what the White House announced today.

AI ART OF THE DAY

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