Hedge Fund Chief’s Inflation Prediction And What it Could Mean for Crypto (Opinion)

A major hedge fund manager said that the Fed will raise interest rates six times by 2024 due to “massive inflation”. This prediction was made in a CNBC interview. As they close out another volatile month, crypto traders keep an eye on the macro-financial climate.

Federated Hermes manages assets in excess of $600 billion. Phil Orlando, chief equity strategist at Federated Hermes, is a long-time stockmarket bull. However, he expects that the Federal Reserve’s big changes will dampen the stock market rally this year.

Orlando: Fed’s Actions and Big Inflation

On Wednesday’s CNBC “Trading Nation”, Orlando spoke with Stephanie Landsman and predicted a series of rate increases, but not until Q3 next year.

“Our best guesses are that there will be two quarter-point rate increases from the Fed in the second year and possibly four more quarter-point rate hikes during calendar ’23.”

Although the Federal Reserve and the White House have made progress in saying that inflation is temporary, Orlando doesn’t believe them.

“The Fed has been, I believe to some extent, talking a good game with the Biden Administration in terms of temporary or transitory inflation.”

He used the minutes of the November Federal Open Market Committee meeting as evidence, where members stated that current conditions warranted a tapering down of the Fed’s huge liquidity operations.

This includes the Fed’s ongoing shopping spree that allows them to purchase U.S. Treasury bonds and mortgage-backed bonds as well as overnight money market loans.

The Fed’s Impact on Crypto

In some ways, the crypto industry’s products can be considered a market substitute for government fiat currencies. They also compete with conventional investments such as stocks. Their prices are set in markets far upstream of global finance and close to the Fed’s sources in new credit in the U.S. banking sector.

However, as mainstream retail investors and institutional investors continue to embrace digital assets, they are becoming an increasingly complementary financial product. Central bank efforts to curb inflation could result in crypto valuations being hit with a double boost.

The digital gold thesis that underpins Bitcoin made it the first cryptocurrency to be successful. It was a non-correlated asset with equities for over a decade. However, mainstream adoption has seen its price correlation with stock markets increase from around a year ago to this year.

Investors can earn higher returns if they invest in less risky investments such as corporate shares or peer-to-peer cryptos.

Washington might also shore up the U.S. Dollar, which could mean that deflationary cryptos used to protect savings from inflation may lose some of their appeal.

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Marla Brooks

Marla Brooks – Financial Analysis My name is Marla Brooks, and I am the mainstream behind the”observednews.com”  for the powerful and most delicate insights into the latest activities in the financial analysis category. I started my journey as an independent financial consultant. I had approximately nine years of experience in this field. I am free soul so; my passion for exploring the world has taken me to the nations across the globe and given me the chance to report for a portion of the best news associations. Currently, I am a full-time editor as experienced in finance and started to use my abilities.

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