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close video Fed is going to keep raising rates, Jim Rickards warns

Strategic Intelligence editor Jim Rickards discusses the Fed’s decision to raise rates by 25 basis points, arguing that policymakers are “determined” to get inflation under control.

The worst banking crisis since the Great Recession could severely tighten credit for U.S. households and businesses, taking a toll on economic growth.

The turmoil that has engulfed the financial system following the stunning collapse of Silicon Valley Bank and Signature Bank has raised the prospect among economists that lending standards will become drastically more restrictive in coming months. 

"Tighter conditions can happen and occur outside the official tightening of the Fed funds rate. There are so many other variables," Jeffrey Roach, chief economist at LPL Financial, told FOX Business. "A banking crisis, in essence, can tighten conditions… I think it’s fair to say that the current banking crisis could also be an equivalent to say, a 50-basis-point rate hike."

During a credit crunch, banks significantly raise their lending standards, making it difficult to acquire a loan. Borrowers may have to agree to more stringent terms like high interest rates as banks try to reduce the financial risk on their end. Fewer loans, in turn, would lead to less big-ticket spending by consumers and businesses. 

FUND MANAGERS WORRY SYSTEMIC CREDIT CRUNCH COULD CRASH US MARKETS

Employees walk outside the shuttered Silicon Valley Bank (SVB) headquarters on March 10, 2023, in Santa Clara, California. (Justin Sullivan/Getty Images / Getty Images)

Gregory Daco, chief economist at the consulting firm EY-Parthenon, said he thinks tighter credit will constrain "business investment, employment growth and consumer spending in the coming months." 

While that could help the Federal Reserve in its fight to tamp down stubbornly high inflation, it also raises the risk of a recession this year. 

"The odds of a recession have risen due to heightened financial market volatility, tightening credit conditions and economic uncertainty," Daco said. "While labor market conditions still look relatively resilient, an abrupt shift in sentiment along with a rapid tightening of financial conditions could push the economy into a recession with businesses and consumers retrenching."

JEROME POWELL'S FAVORITE BOND MARKET GAUGE FLASHES RECESSION WARNING SIGN

Chairman Jerome Powell acknowledged during the Fed's two-day meeting last week that upheaval within the financial sector could tighten credit for American households. He suggested that stricter lending standards could have a similar effect on inflation that a rate increase can.

"Such a tightening in financial conditions would work in the same direction as rate tightening," Powell said. "You can think of it as being the equivalent of a rate hike or perhaps more than that."

Jerome Powell, chairman of the U.S. Federal Reserve, speaks during at a news conference in Washington, D.C., Wednesday, March 22, 2023. (Al Drago/Bloomberg via Getty Images / Getty Images)

His comments came shortly after policymakers delivered another quarter-percentage point rate hike, lifting the benchmark funds rate to a range of 4.75% to 5%, the highest since 2007. It marked the ninth consecutive rate increase aimed at combating high inflation.

Fed officials are in the midst of the most aggressive tightening campaign since the 1980s as they try to crush inflation still running about three times higher than the pre-pandemic average. Before the spate of bank collapses earlier in March, the Fed had considered raising rates by a half-percentage point in the face of strong economic data, Powell said Wednesday.

But fears over a broader financial crisis complicated the Fed's efforts, because the rapid rise in interest rates played a direct role in the failure of Silicon Valley Bank. Increasing interest rates threatens to exacerbate instability within the financial system. Powell said it is too soon to say how banking sector stress will affect the broader economy.

YELLEN SAYS US WILL TAKE MORE ACTION TO PROTECT SMALLER BANKS IF NEEDED

"Financial conditions seem to have tightened and probably by more than the traditional indexes say," he said. "The question for us, though, is how significant will that be – what will be the extent of it, and what will be the duration of it?

 "We’ll be looking to see how serious is this and does it look like it’s going to be sustained. And, if it is, it could easily have a significant macroeconomic effect, and we would factor that into our policy decisions."

Pedestrians near the U.S. Treasury building in Washington, D.C., Dec. 30, 2022. (Ting Shen/Bloomberg via Getty Images / Getty Images)

SVB largely catered to tech companies, venture capital firms and high net worth individuals who were pulling cash at a rapid pace as the once red-hot tech sector cooled. When the bank announced it was trying to raise capital from investors and that it would take a $1.3 billion loss on long-term securities that had tumbled in value amid higher interest rates, depositors panicked and a bank run ensued.

Within days, U.S. regulators took extraordinary steps to contain the fallout from the bank's collapse and shore up wavering confidence in the financial system, including protecting all deposits at the two institutions – even those holding funds that exceeded the FDIC's $250,000 insurance limit. 

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The Fed also launched a new emergency backstop for lenders to help them meet deposit withdrawals under favorable terms. 

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Crypto stocks down, IPOs punted amid tariff tumult

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Crypto stocks down, IPOs punted amid tariff tumult

Crypto stocks down, IPOs punted amid tariff tumult

Cryptocurrency firms felt the heat from US President Donald Trump’s sweeping tariff rollout this week as market turbulence sent share prices tumbling and foiled initial public offering (IPO) plans. 

From exchanges to Bitcoin (BTC) miners, crypto stocks suffered as much, if not more, than shares of other companies — despite the industry’s warm relationship with the US president. 

On April 2, Trump announced he was placing tariffs of at least 10% on practically all imports into the United States and adding additional “reciprocal” tariffs on some 57 countries. 

Since then, major US stock indices — including the S&P 500 and Nasdaq — tumbled by roughly 10% as traders braced for a looming trade war. 

Crypto stocks down, IPOs punted amid tariff tumult

Bitcoin miners sold off on Trump’s tariff news. Source: Morningstar

Related: Bitcoin ‘decouples,’ stocks lose $3.5T amid Trump tariff war and Fed warning of ‘higher inflation’

Sharp selloffs

Crypto exchange Coinbase — a prominent ally of Trump during the November US elections — experienced a similarly severe sell-off, with its stock price dropping by roughly 12% during the same period, according to data from Google Finance.

Bitcoin miners are also taking a hit. The CoinShares Crypto Miners ETF (WGMI) — which tracks a diverse basket of Bitcoin mining stocks — has lost roughly 13% of its value since immediately prior to Trump’s April 2 announcement, according to data from Morningstar. 

Even Strategy, one of the best-performing stocks of 2024, wasn’t immune. Its share price has fallen by around 6% on the news, Google Finance data showed.

According to Reuters, investment bank JPMorgan has raised its estimated odds of a global economic recession in 2025 to 60% from 40% previously. 

“Disruptive U.S. policies have been recognized as the biggest risk to the global outlook all year,” JP Morgan reportedly said.

“The effect … is likely to be magnified through (tariff) retaliation, a slide in U.S. business sentiment and supply-chain disruptions.”

Crypto stocks down, IPOs punted amid tariff tumult

Strategy’s shares also dropped this week. Source: Google Finance

IPO delays

The impact of US tariffs hasn’t been limited to stock price volatility. Stablecoin issuer Circle has reportedly paused plans for a 2025 IPO, citing market turbulence. 

According to The Wall Street Journal, Circle is “waiting anxiously” before taking further steps after filing to take the company public on April 1. 

It is among several companies — including fintech Klarna and ticketing service StubHub — reportedly considering altering or shelving IPO plans. 

One exception may be Bitcoin itself, which some analysts say is finally “decoupling” from the broader market.

Bitcoin’s spot price has held above $82,000 this week, even as US equities markets collapsed.

Magazine: Unstablecoins: Depegging, bank runs and other risks loom

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Politics

Brazilian court authorizes crypto seizure for debt collection — Report

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Brazilian court authorizes crypto seizure for debt collection — Report

Brazilian court authorizes crypto seizure for debt collection — Report

Brazilian judges have been authorized to seize cryptocurrency assets from debtors who owe money and are behind on their payments, signaling a growing recognition that digital assets can be both a form of payment and a store of value.

According to local media reports, the Third Panel of Brazil’s Superior Court of Justice unanimously authorized judges to send letters to cryptocurrency brokers informing them about their intent to seize an account holder’s assets to repay creditors.

The report was confirmed by the Superior Court of Justice, which issued a notice on its website.

The decision was reached unanimously by the Third Panel, which reviewed a case brought forward by a creditor.

“Although they are not legal tender, crypto assets can be used as a form of payment and as a store of value,” a translated version of the Superior Court of Justice’s memo read.

Brazilian court authorizes crypto seizure for debt collection — Report

Source: STJnoticias

Under existing rules, Brazilian judges are allowed to freeze bank accounts and order fund withdrawals, even without a debtor’s knowledge, should they rule that a creditor is owed money.

Following the recent decision, crypto assets now fall under the same purview. 

Minister Ricardo Villas Bôas Cueva, who voted in the five-person panel, said cryptocurrencies still lack formal regulation in Brazil but noted certain bills have recognized the asset class as “a digital representation of value.” 

Related: Brazil’s data watchdog upholds ban on World crypto payments

Despite regulatory uncertainty, Brazil is a major hub for crypto

Although Brazil still lacks an overarching framework for digital assets, with the country’s central bank divvying up the regulatory processes into phases, crypto adoption is surging across the country.

Brazil ranks second among all Latin American countries in terms of “crypto value received,” which is a key benchmark for adoption, according to an October report by Chainalysis. 

Brazilian court authorizes crypto seizure for debt collection — Report

In Latin America, only Argentina has higher crypto penetration in terms of value received as of June 2024. Source: Chainalysis

Earlier this year, crypto exchange Binance was granted approval to operate in the country after it acquired a São Paulo-based investment company. 

A Binance executive told Cointelegraph at the time that Brazil was making “significant strides” in regulating the industry and expects a comprehensive framework to be finalized “by mid-year.”

Nevertheless, not all of Brazil’s regulatory proposals have been favorable for the industry.

In December, the country’s central bank proposed banning stablecoin transactions on self-custodial wallets at a time when more locals were using dollar-pegged tokens to hedge against the devaluation of the Brazilian real.

Industry observers told Cointelegraph at the time that such a ban would be difficult to enforce.

“Governments can regulate centralized exchanges, but P2P transactions and decentralized platforms are much harder to control, which means the ban would likely only affect part of the ecosystem,” said Lucien Bourdon, an analyst with Trezor. 

Related: Brazilian lawmaker introduces bill to regulate Bitcoin salaries

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Environment

EcoFlow members can save up to 65% on power stations while supporting disaster relief during the 2025 Member’s Festival

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EcoFlow members can save up to 65% on power stations while supporting disaster relief during the 2025 Member's Festival

Portable power station specialist EcoFlow is kicking off its third annual Member’s Festival this month and is offering a unique new rewards program to those who become EcoFlow members. The 2025 EcoFlow Member’s Festival will offer savings of up to 65% for its participating customers, and a portion of those funds will be allocated toward rescue power solutions for communities around the globe through the company’s “Power for All” fund.

EcoFlow remains one of the industry leaders in portable power solutions and continues to trek forward in its vision to power a new tech-driven, eco-conscious future. Per its website:

Our mission from day one is to provide smart and eco-friendly energy solutions for individuals, families, and society at large. We are, were, and will continue to be a reliable and trusted energy companion for users around the world.

To achieve such goals, EcoFlow has continued to expand its portfolio of sustainable energy solutions to its community members, including portable power stations, solar generators, and mountable solar panels. While EcoFlow is doing plenty to support its growing customer base, it has expanded its reach by giving back to disaster-affected communities by helping bolster global disaster response efforts the best way it knows how– with portable power solutions.

EcoFlow Member
Source: EcoFlow

EcoFlow and its members look to provide “Power for All”

Since 2023, EcoFlow has collaborated with organizations worldwide as part of its “Power for All” mission. This initiative aims to ensure access to reliable and timely power to disaster-affected communities across the globe, including rescue agencies, affected hospitals, and shelters, to support rescue and recovery efforts.

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This fund most recently provided aid for communities affected by the recent Los Angeles wildfires, assistance to the Special Forces Charitable Trust (SFCT) in North Carolina following severe hurricanes, and support for non-profits engaged in hurricane preparedness in Florida and the Gulf Coast. Per Jodi Burns, CEO of the Special Forces Charitable Trust:

In the wake of devastating storms in Western North Carolina, reliable power was a critical need for the families we serve. Thanks to EcoFlow’s generous donation of generators, we were able to provide immediate relief, ensuring these families and their communities had access to power when they needed it most. We are so impressed with EcoFlow’s commitment to disaster response through their ‘Power for All’ program. It has made a tangible impact, and we are deeply grateful for their support and partnership in helping these families recover and rebuild.

In 2024, the US experienced 27 weather and climate events, each causing losses exceeding $1 billion, marking the second-highest annual total on record, according to National Centers for Environmental Information. The increasing frequency and severity of natural disasters underscore the critical need for reliable and timely power solutions during emergencies, much like EcoFlow and its members are helping provide through the “Power For All” initiative.

To support new and existing EcoFlow members, the company is celebrating its third annual Member’s Festival throughout April to offer a do-not-miss discount on its products and donate a portion of all sales to the “Power for All” fund to provide rescue power to those in need in the future. Learn how it all works below.

Source: EcoFlow

Save big and give back during the 2025 Member’s Festival

As of April 1st, you can now sign up to become an EcoFlow member to participate in the company’s exclusive 2025 Member Festival.

As a member, you can earn “EcoFlow Power Points” by completing tasks like registration, referrals, and product purchases and tracking your individual efforts toward disaster preparedness and recovery.

Beginning April 4, EcoFlow members will also be able to take advantage of exclusive discounts of up to 65% off select portable power stations, including the DELTA Pro Ultra, DELTA Pro 3, DELTA 2 Max, DELTA 3 Plus, RIVER 3 Plus, and more. However, these sale prices only last through April 25, so you’ll want to move quickly!

Click here to learn more about EcoFlow’s “Power for All” campaign. To register for EcoFlow’s 2025 Member Festival in the US, visit the EcoFlow website. To register as a member in Canada, visit here.

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