Has inflation peaked in the United States? -Bitcoin Magazine


“Fed Watch” is a macro podcast, true to the rebellious nature of bitcoin. In each episode, we challenge traditional narratives and Bitcoin by examining current macro events around the world, with a focus on central banks and currencies.

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In this episode, CK and I had the privilege of sitting down with Andreas Stenowho is the publisher of Real Vision, co-host of the “Macro Trading Floor” podcast and author of “Steno signals” blog on Substack. Our discussion revolves around the energy situation in Europe, but we begin by talking about the Fed’s Federal Open Market Committee (FOMC) rate hike. Steno has an in-depth knowledge of bitcoin and his “Macro Trading Floor” podcast is hosted by Blockworks, which means we also have to ask him what he thinks of the bitcoin market.

The Federal Reserve increases federal funds by 75 basis points

Our timing for this interview was fortuitous, as we were able to speak with Steno immediately after the Fed released its policy decision – even before he gave his own summary on “Real Vision”.

We start by getting Steno’s general reaction to the Fed’s policy decision. He says Chairman Jerome Powell has been very clear that they don’t want the market betting on a pivot. The dot chart showed that the average FOMC member expects the Fed to rise to 4.5% in early 2023. The intention was also very clear, they want to lower asset prices , overwrite the request.

Interpretation of the consumer price index

The Fed is trying to be very clear about its goals and methods, and also very clear about the cause of its hawkish policy, ie above target CPI. I asked Steno what he thought of the US CPI numbers.

His thinking is in line with mine that it looks like the CPI has peaked with the largest component of the August CPI being housing which is well known as the most lagging part of the basket. Therefore, if the lagging part of the basket is the only component to continue rising, it must mean that the price impulse is reversing.

Steno also says he expects the CPI drop to catch most people off guard, offering plenty of reasons you’ll have to watch or listen to.

Exaggerated European energy crisis?

The topic I was most eager to discuss was the European energy crisis. Steno lives in Europe and has studied energy flow extensively. In the interview, he gives natural gas storage figures and flows from all over the world. It was also surprising to learn that perhaps the biggest contributing factor to the wild price hike was the fact that European leaders ordered countries to rush to fill their reserves. This led to everyone buying additional natural gas all at once. Now that reserves are nearly full, and it’s before the peak natural gas usage season, there could be a reverse effect where prices crash.

Overall, listening to Steno, I understood that the situation is less serious than the mainstream financial press suggests. There will be pain this winter, the economy has already had a fallout in the chemical industry and so on, but it is not an event that will end civilization as many believe.

In this episode, of course, we talk about bitcoin and the possibility of a euro currency breakup. Steno has strong opinions about the structure of the euro and the likelihood of bitcoin stepping in and making the difference in a breakout, but you’ll have to watch and listen to hear that.

This is a guest post by Ansel Lindner. The opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc. or Bitcoin Magazine.


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