Major stock indexes, precious metals and cryptocurrencies all suffered significant losses following Jerome Powell’s hawkish comments at the annual Jackson Hole Economic Symposium.
The crypto market lost over $240 billion and the Crypto Fear and Greed Index continued to fall, edging towards “extreme fear”. Additionally, Todd Horwitz, chief strategist at bubbatrading.com, explained that the Federal Reserve raising rates in a recession would have devastating effects on America’s middle classes.
Jerome Powell , the Federal Reserve Chair, explained how fixing the American economy will take “sometime. The central bank chief stated that the Fed’s strict policies would cause “some pain”. Wall Street shuddered after Powell’s Wyoming statements. At the close of Friday’s bell, all three major benchmarks (S&P500, Dow Jones and Nasdaq Composite), were down more that 3%. The biggest loser Friday was Nasdaq, which lost 3.94%. This is its worst loss since mid-June.
S&P 500 fell by 3.37% to close the day at 4,057.66. The Dow Jones Industrial Average lost more than 1,000 points, or 3.03%, during the same period. To start the weekend, the world’s two most valuable metals, silver (Au), and gold (Au), fell between 1.13 (Au), to 1.79% (Au). The price of platinum (Pt), which fell by 2.38%, and palladium(Pd), dropped 1.49% against the U.S. dollars.
The Fed chair’s comments were not well received by cryptocurrency markets. On Friday, the cryptocurrency economy lost 6% and then fell another 4% on Saturday (EST). The leading crypto asset, bitcoin , fell below the $20K unit zone during Saturday’s trading sessions (EST). This was the first time since mid July. Bitcoin.com News reported that the Crypto Fear and Greed Index, (CFGI), fell to 33 on August 19. This was after the CFGI rating had moved higher until August 14.
Today’s CFGI score is lower than the 33 recorded nine-days ago. The current CFGI rating is a 28 or “fear” and the Cboe Volatility Index(VIX) saw a 3.78 points increase following Powell’s ten minute speech. Nasdaq volatility shows similar fluctuations to the VIX volatility gauge. Research has shown that cryptocurrency and bitcoin markets are more correlated than ever before.
Arcane Research first highlighted the correlation in May 2022. Researchers stated that Bitcoin ( ) has fallen 71% from its all-time high (ATH), which was printed on November 10, 2021. Similarly, ethereum( ETH), is down 69.6% from its ATH. BTC dropped more than 80% during the three bear cycles. ETH fell 90% against the U.S. Dollar.
Many strategists, analysts, investors, and others believe that global markets will only get worse. Todd Horwitz, chief strategist at Bubbatrading.com stated to Kitco’s David Lin in a recent interview how stock markets could drop another 50%. Horwitz said that he was predicting a Fed hike in rates during what many consider a recession.
Horwitz also noted that financial moves could be linked to the controversial Great Reset. Lin was told by Horwitz that the U.S. central banking is raising rates in times of recession. Horwitz added that “it’s never been done before in history… There’s a political agenda behind everything that’s happening, which is trying to create the Great Reset.”
The administration of Biden is seeking the Great Reset. There will be no middle class.
Horwitz also spoke out about Powell’s comments at the Jackson Hole Symposium. According to the market strategist, Powell’s remarks were “the words of an idiot”. This was a reference to Powell’s statement at last year’s Symposium that inflation is transitory.
Horwitz stated that “Jerome Powell] is trying get away from what is going to happen, and which is going to hyperinflation.” Wait until oil prices start rising again. What do you think will happen to inflation? This year, we’ll have a shortage of food. The strategist said that there will be food riots across many countries.
According to bubbatrading.com, equities will suffer but there may still be some opportunistic potential in the commodities markets. Horwitz stated that he expects to see a 50% to 60% haircut in these [equities] market. “Anyone can see the recession in their finances and are watching what they spend.”