Monday's Markets Update (December 11, 2023)

11 Dec 2023 by rate3

On Monday, the Nasdaq rose, continuing its sixth straight weekly gain, as investors turned their attention to the upcoming Fed meeting and inflation data. While optimism remains, higher inflation could impact expectations for rate reductions. In the meantime, BTC and ETH experienced a significant correction, sliding up to 7% due to aggressive profit-taking by traders.

Details

According to NY Fed, consumer inflation expectations for the coming year dropped to 3.4% in November, the lowest since April 2021, continuing a trend of lower inflation. Fuel and rent price growth expectations also eased. Inflation expectations for the next three and five years remained stable at 3% and 2.7% respectively.

Crypto

Government removes two AML provisions related to cryptocurrency regulation. First, US Secretary of the Treasury must collaborate with regulators to establish a risk-focused examination system for crypto in financial institutions. Second, a comprehensive report detailing crypto transactions linked to sanctioned entities is required. Senators Cynthia Lummis, Elizabeth Warren, Kirsten Gillibrand, and Roger Marshall championed those stupid provisions.

Comment

The recent regulatory developments signaling a potential shift in the anti-crypto tide are noteworthy. The removal of two critical provisions related to cryptocurrency anti-money laundering (AML) regulations reflects a dynamic landscape shaped by various factors.

Firstly, as the political season gains momentum, the rift between the GOP and DEM becomes more apparent. The collaboration mandated by the first provision, requiring the US Secretary of the Treasury to work with banking and government regulators to establish a risk-focused examination system for cryptocurrencies within financial institutions, may indicate a recognition of the difficulties of finding common ground in this space.

Secondly, amidst the looming recession, policymakers may be motivated to decrease pressure on private businesses, including those in the crypto sector. Regulatory adjustments could be a strategic move to foster innovation and alleviate burdens on an industry that has shown resilience in the face of economic challenges.

Third, the perception that enough has been done to suppress crypto, particularly through crackdowns on major players like Binance and Ripple, might be influencing a more nuanced approach. The harsh anti-crypto regulations' push, led by a group of senators with ridiculously uninformed stance on crypto, including Cynthia Lummis, Elizabeth Warren, Kirsten Gillibrand, and Roger Marshall, might be running off steam.