The Fed offset, and SOL futures

plus, notes on the Bessent interview

“The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.” – Friedrich Hayek ||

Hi everyone, I hope you’re all doing well!

Today I take another look at the FOMC, this time focusing on yesterday’s statement and updated economic forecasts. I also compare Monday’s SOL futures launch on the CME to those of BTC and ETH, and I squint at what’s ahead. And, some notes from an illuminating interview of Treasury Secretary Scott Bessent – yes, he does briefly mention crypto!

The latest episode of Bits & Bips is out! James Seyffart, Joe McCann, Ram Ahluwalia and myself debate markets, Trump’s strategy, SOL futures and more… You can watch it here, or listen here (Spotify link).

IN THIS NEWSLETTER:

• The Fed offset

• SOL futures

• Podcast notes: The Bessent interview

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WHAT I’M WATCHING:

The Fed offset

So, another FOMC meeting is in the bag, and we got more or less what I suggested on Monday: a stagflationary adjustment to expectations, and a welcome easing of Quantitative Tightening (in which the Federal Reserve was reducing the amount of securities held on its balance sheet by not renewing those that matured).

The updated Summary of Economic Projections (SEP) lowered expected GDP growth from 2.1% to 1.7% (ouch) and increased the forecast of inflation from 2.5% to 2.8% (double ouch). Since the increase in expected inflation was less than the expected drop in GDP, Fed economists are signalling lower nominal growth ahead.

(table via the Federal Reserve)

So, why didn’t markets plummet?

(S&P 500 chart via TradingView)

For three main reasons: