Revolt of the Masses

Last month, Jerome Powell and the Federal Reserve cut interest rates by 50 bps, marking their first rate cut in over four years. The move aimed to lower borrowing costs and give the economy some breathing room ahead of the election.

Here's how that's going:

Not well.

Driving the news: Since the September cuts, things have been moving in the opposite direction of what the Fed intended. Mortgage rates, for example, have gone up, not down. You could say the same for your rising monthly insurance bill, sluggish existing home sales, and the latest employment data showing the weakest job openings in over three years.

Zoom out: The clearest sign of concern, however, is the recent trend in the bond market. Long-duration bonds like the 10-year U.S. Treasury have been on a tear, with yields breaking 4%+ and rising 70 basis points since rates were slashed.

This marks the biggest rise in rates following a first cut since 1989.

Again, this wasn’t supposed to happen.

What it means: While Jerome Powell and the Fed are trying to convince everyone that inflation is cooling, the market is effectively crying out “bullshit.”

When the U.S. 10-year Treasury yield rises rapidly, it generally signals that investors expect higher interest rates, stock market pressure, or inflation ahead.

Is The Writing On The Wall?

History shows that when Federal Reserve policies lose their effectiveness, the bond market steps in and takes the reins.

Essentially, the bond market starts dictating economic direction, offering clues about what's next.

Will inflation continue to bite us? Bonds are saying yes.

Will a Trump victory help? Bonds say no. Trumps odds of winning this election are rising almost in unison with yields.

Think this is just a US problem? Yields are rising seemingly everywhere, across all developed economies.

Simply put, the Fed has lost control… and the masses are revolting.

Pick Your Safe Haven

This week, bitcoin inched closer to it's all-time high of $73.6k. Yesterday, we just a couple candles away from celebrating. So close.

Most publications will point to the news of Emory’s endowment joining the crusade, or Microsoft (MSFT) shareholders voting for bitcoin on the balance sheet as reason for the recent uptick in prices. A Trump presidency could make bitcoin great again, some say.

But we find there to be no coincidence that bitcoin (and gold) is shining its brightest, while investors are simultaneously dumping “safe haven” government bonds.

Seems like some investors are currently in favor of real money.

Election day comes next week. Another FOMC meeting on Nov. 7. Oct. payrolls come this Friday. The next CPI print comes Nov. 13.

The stakes are at an all-time high, and to no surprise – so is bitcoin.

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Coinbase Reports Earnings Today – Here’s What We’re Watching For

Coinbase reports earnings today at close. Wall Street analysts are expecting the exchange to report:

While analysts have been pretty wrong on Coinbase before, we at CoinSnacks actually feel they are pretty spot on this quarter.

Here’s what else we’re watching:

BASE: By all metrics, BASE is absolutely crushing it. If there is one major surprise in this quarter’s earnings results it will come from BASE. Regardless, BASE has cemented itself as a future cash-cow for Coinbase.

International: The company continues to make strides with it’s international markets. At some point the company will be able to raise the fees it charges. While we don’t expect it to occur for a while, we would still like to get an update on how the expansion is going.

Q4 Outlook: With BTC looking like it’s going to be hitting ATHs in Q4, we will be interested to hear what the team is seeing in regards to trading activity.

Robinhood Also Reporting Today

As we have pointed out a few times this year, Robinhood’s stock price has been absolutely trouncing Coinbase YTD.

We’ll be covering the earnings of both companies next week after we have time to digest. Stay tuned…

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