Fed swaps show signs of no more gains

While 2022 is one of the most worrisome events in the cryptocurrency space, with some of the biggest players plummeting, 2023 is proving to be a nightmare for the big banks. From the collapse of Signature Bank to Silicon Valley Bank to Silvergate, the fallout has rippled across the market.

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With the price of cryptocurrencies plummeting and stock prices falling, the impact on the macro market is significant. In the current environment, with Treasury prices soaring and two-year yields at rock-bottom levels, investors are expecting policy makers to stop rising. Fed swaps also suggest that another 25 basis point rise is less than a 1/2 chance.

Has the market’s worst moment come yet?

The two-year yield, the most vulnerable to policy changes, fell 60 basis points to less than 3.99%, the biggest drop since October. This is another sign that the Fed is unlikely to move higher in March.

Goldman Sachs economists no longer see a reason for the Fed to rise at next week’s meeting due to “near-term stress” in the financial sector. In a recent note, he mentioned that they don’t expect the Fed to go up in March.

Source of information: Compiled from WATCHER by 0x Information.Copyright belongs to the author, Vignesh Karunanidhi, and may not be reproduced without permission

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