On Monday, March 23, the Federal Reserve of the United States issued a notice announcing the launch of a series of new QE programs to help the financial system function properly in the current crisis. , as reported by CNBC.
The Fed intends to continue with its initiative to buy assets with the money necessary to support smooth market operations and effectively convey monetary policy to the broader financial markets and economy.
In other words, the Fed guaranteed to “print money” because it insisted on continuing to expand the balance sheet as needed, rather than committing to the established amount.
Other programs include: indefinite loans to businesses on Main Street and Lending facilities backed by term assets during the financial crisis. There will be a $ 300 billion program to “support the flow of credit” to employers, businesses and 2 institutions that are set up to provide credit to large employers.
After the announcement, the market responded positively. Stock market rebounded. The most recent Dow futures index gained more than 400 points when it opened.
The Fed also said it would buy the agency's commercial mortgage securities as part of an expansion of its own asset purchases, or QE. The move was expanded into real estate trading for central bank acquisitions. Bleakley Advisory Group's Chief Investment Officer Peter Boockvar said in a note:
“Currently, we are perform QE come in limit once again”.
In addition, there are other measures such as issuing security securities backed by student loans, car loans, credit card loans, and Bank-guaranteed loans. small business management and some other assets.
Monday's announcement showed that the Fed is intervening in the strongest market to date.
They have previously announced they will buy $ 500 billion of the Treasury and $ 200 billion MBS. The new move represents an open end commitment to the QE program. Financial and economist Chris Rupkey at MUFG Union Bank said:
“Fed policy rises to new heights to try to support the economy that seems to be plummeting freely at the moment. The central bank becomes the last lender and the last buyer. Do not ask how much they will buy, this is really infinite QE.
The Fed is also expanding its commercial paper fund (Commercial Paper Funding Facility). The current program will include “high-quality, duty-free commercial currencies” and reduced prices.
Programs are supported by the Treasury Department to ensure the Fed doesn't lose money. Treasury Secretary Steven Mnuchin said in a statement:
“We are committed to providing relief to you labor and American businesses, especially small and medium enterprises as Important industries are the hardest hit by Corona virus. We will take all necessary steps to support them and protect the US economy. ”
Anthony Pompliano posted a reminder that the Fed announced its goal of injecting $ 700 billion into the financial system last week. Now, regulators announced that they would buy an unlimited amount of coffers and mortgage bonds.
“Remember the $ 700 billion program the Fed announced to buy treasury and mortgaged stocks last Sunday? Remember it was considered a BIG solution? Now they announce a goal of increasing from $ 700 billion to “unlimited” and will buy any type of bonds at the moment. “
Remember the $ 700B program the Fed announced to buy Treasuries & mortgage-backed securities last Sunday?
Remember how it was supposed to be the BIG solution?
Well they just announced they are increasing the $ 700 billion target to “unlimited” and will buy any type of bonds now.
– Pomp 🌪 (@APompliano) March 23, 2020
Bitcoin price has unexpectedly broken the $ 6,000 barrier and is currently at $ 6,354.
Within 40 minutes, the price increased from $ 5,850 to its current level before continuing to go up slightly. Now it has returned to yesterday's high. This means that the price of Bitcoin is continuing to recover after the price collapse on March 12. After seeing a low of $ 4,580, the price has increased by 37% in the past 11 days.
The rest of the market has yet to rise following Bitcoin's price action. Most coins have remained in the red for the past 24 hours, though not as much as this morning. ETH increased slightly by 0.08%, XRP decreased by 1.56%.
Bitcoin's price hike has increased by $ 5 billion to total global crypto market capitalization. At the same time, Bitcoin's dominance has increased slightly from 65% to 65.4%.
However, bitcoin miners have not shown any sign of rejoin. Recent price cuts have made mining less beneficial for many miners, especially in China. With the upcoming Bitcoin halving, the conditions seem bad for miners, as the charts below show.
Hashrate continues to reverse pic.twitter.com/1aq6D6ySEL
– Unfolded (@cryptounfolded) March 22, 2020
Now the Bitcoin bulls on Twitter are crazy with joy, sharing extremely optimistic emotions.
Crypto Twitter is flooded with price-increasing posts from experts. They are sharing the excitement and optimism about the impact of new QE measures on Bitcoin price before halving takes place in less than two months.
– WhalePanda (@WhalePanda) March 23, 2020
“The present is a good condition for Bitcoin. Just like Bitcoin will fix this situation. ”
– Gabor Gurbacs (@gaborgurbacs) March 23, 2020
“The Fed will buy unlimited Bonds and mortgages, while only 21M Bitcoin.”
The US is looking at a bailout pack close to $ 5T.
That’s just one country. One of many packages to come.
How could you not find Bitcoin attractive right now?
– Dan Hedl (@danheld) March 22, 2020
“The United States is considering a bailout package of nearly $ 5 trillion. That is only for one country. More relief packages will come. Why can't you find Bitcoin attractive at the moment? ”
The Federal Reserve says there is an “INFINITE AMOUNT OF CASH”
This is quite literally the reason bitcoin was created. pic.twitter.com/JTE9TVoSr0
– Vis (@Vis_in_numeris) March 23, 2020
The Fed said there will be an unlimited amount of money being pumped. This is absolutely the reason why Bitcoin was created. ”
Bitcoin has surpassed $ 6,000 and traders are making price predictions. Analyst ‘Crypto Michael’ tweeted that BTC is likely to reach $ 6,800. Turning this level to support will allow it to go higher.
Thank you FED, Unlimited QE!
We fairly getting those higher tests at $ 6,400-6,500 and maybe even $ 6,800-6,900, it looks like.
Bias remains the same until we flip $ 6,800 for support. pic.twitter.com/gA8Mqjt6kW
– Crypto Michaël (@CryptoMichNL) March 23, 2020
“Thanks Fed, QE is not fixed.
We are trying to test higher levels in the $ 6400-6500 area and possibly even $ 6800-6900 ″.
You can see the price of Bitcoin here.
Disclaimer: This is not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.
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