According to a recent tweet from the official Bitcoin Twitter account, the Federal Reserve reportedly faces financial difficulties and is now technically insolvent. Sources suggest that the FED is projected to incur a staggering $80 billion operating loss by 2023, marking a significant milestone in its financial history. Seeing how the FED navigates these challenging economic waters will be attractive as the situation unfolds.
In a historic turn of events, the FED has reported an annual operating loss of $80 billion, marking the first occurrence of such a setback since 1915. Furthermore, reports indicate that the FED’s capital has dipped into negative territory, amounting to $38 billion. It’s worth noting that this loss doesn’t account for the $1.3 trillion in unrealized losses on the FED’s portfolio. These developments cause concern and warrant close attention from financial experts and policymakers alike.
In 2023, the financial sector has been abuzz with news of the closure of central banking institutions. Silvergate Bank, Silicon Valley Bank, and Signature Bank have all ceased their operations, significantly impacting the industry. The failure of these banks, notably Silicon Valley Bank, is regarded as one of the most significant setbacks since the financial crisis of 2008.
Despite fluctuations in market prices on Monday, the prevailing sentiment suggests that the FED will continue to pursue its monetary policy tightening. Traders have projected an 85% probability of a 0.25% hike in interest rates at the Federal Open Market Committee’s upcoming meeting in Washington, D.C., on March 21-22.
Goldman Sachs announced on Monday that it foresees no interest rate hikes by the Federal Reserve this month. Nevertheless, this perspective is not widely shared by other Wall Street analysts. In contrast, Bank of America and Citigroup predict a quarter-point rate increase by the FED.
Despite the tumultuous state of affairs, the cryptocurrency market has been experiencing a surge in bullish activity. Bitcoin has surpassed the $24,500 threshold, and the entire market is thriving. However, the possibility of this being a bull trap remains uncertain.
