The Bitcoin Layer The Fed Is NOT In Control: Why Markets Lead & Bitcoin Reacts
23 snips
Sep 19, 2025 The podcast dives into the implications of the Fed's recent rate cut and how markets had already anticipated it. The hosts explain the concept of the Fed's neutral rate and highlight the lag in central bank policies compared to market signals. They explore how liquidity dynamics impact Bitcoin's pricing and discuss historical ties between the Fed and government fiscal strategies. Insights on inflation expectations and the interrelation between monetary independence and fiscal realities add depth to the conversation.
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Markets Lead, Fed Follows
- The Fed is a lagging indicator that reacts to economic data rather than predicts it.
- Markets lead by pricing information immediately, so investors should watch markets not just Fed moves.
What The Neutral Rate Means
- The neutral rate is the Fed's estimate of a policy rate that balances inflation and employment.
- The dots show this communication, letting markets know where the Fed expects rates to settle.
SOFR Curve Signals Fed Expectations
- The SOFR curve and futures show what markets expect short-term policy rates to be.
- When that curve priced cuts to ~3%, markets had already anticipated the Fed's moves before announcements.
