The latest meeting of the Federal Reserve System (FRS) resulted in the expected 25 basis point rate hike. During the subsequent press conference, Powell’s comments made it evident that the FRS now recognizes the severity of the issues in the banking sector.
The FRS is acutely aware that it would be to blame for any potential banking crisis. As a result, the FRS provided a clear signal that it will need to ease its monetary policy, with the only question being the timing of such action.
However, the FRS also acknowledges that increasing entropy makes it difficult to make any obvious decisions. It recognizes that global financial chaos could be on the rise. Moreover, the conflict over raising the debt ceiling further complicates matters. Although this issue is not directly related to the FRS, it is still tied up in it. So, what implications does this have for the crypto market?
With many depositors losing confidence in the US banking system due to the ongoing crisis, this could serve as a reason for more funds to flow into crypto. Furthermore, if the collapse of banks continues, the FRS will have no option but to print trillions of dollars to save them. This would cause the crypto rate to skyrocket.
