{"id":127030,"date":"2025-04-11T21:21:33","date_gmt":"2025-04-11T21:21:33","guid":{"rendered":"http:\/\/cryptospotters.net\/?p=127030"},"modified":"2025-04-11T21:21:33","modified_gmt":"2025-04-11T21:21:33","slug":"us-fed-absolutely-ready-to-step-in-if-liquidity-dries-up-voting-member","status":"publish","type":"post","link":"http:\/\/cryptospotters.net\/?p=127030","title":{"rendered":"US Fed &#039;absolutely&#039; ready to step in if liquidity dries up \u2014 Voting member"},"content":{"rendered":"<p>Source: Cointelegraph.com NewsThe US Federal Reserve is prepared to use its vast arsenal of monetary policy tools to prevent financial and economic conditions from deteriorating rapidly but will do so only if liquidity dries up or markets become disorderly, a top central banker said.<br \/>\nIn an interview with the Financial Times, Boston Fed President Susan Collins said the central bank \u201cwould absolutely be prepared\u201d to backstop markets if needed.<br \/>\nSource: Walter BloombergWhile it is generally understood that the Fed is always prepared to act quickly to stave off market chaos, Collins\u2019 remarks come on the heels of asset selloffs across stocks and bonds, which have raised concerns about the health of the US financial system.<br \/>\nOverall, however, the Fed is \u201cnot seeing liquidity concerns,\u201d said Collins. If that were to change, policymakers would have \u201ctools to address concerns about markets functioning or liquidity,\u201d she said.<br \/>\nThe Fed\u2019s Collins pictured in a December interview with Bloomberg. Source: Bloomberg TelevisionFor investors, Collins\u2019 comments may carry extra weight because she\u2019s a voting member of this year\u2019s Federal Open Market Committee (FOMC) \u2014 the 12-person panel responsible for setting interest rates.<br \/>\nWhile Collins and her fellow FOMC members voted to keep interest rates steady at their March meeting, the biggest takeaway was the central bank\u2019s easing off on quantitative tightening by reducing the redemption cap on Treasurys by 80%.\u00a0<br \/>\nRelated: S&amp;P 500 briefly sees \u2018Bitcoin-level\u2019 volatility amid Trump tariff war<br \/>\nThe Fed moves markets<br \/>\nFederal Reserve policy exerts a gravitational pull on global markets through US dollar monetary liquidity, or the ease with which dollars can be used for investments and transactions. Liquidity has a major impact on digital asset prices, including Bitcoin (BTC).\u00a0<br \/>\nThis was further corroborated by a 2024 academic paper by Kingston University of London professors Jinsha Zhao and J Miao, which concluded that dollar monetary liquidity \u201chas [a] significant impact on Bitcoin price.\u201d<br \/>\nThe relationship strengthened after the COVID-19 pandemic, with liquidity conditions accounting for more than 65% of Bitcoin\u2019s price movements.<br \/>\n\u201cAfter the pandemic, [monetary liquidity] is the most important determinant of Bitcoin price, outperforming even fundamental measures of Bitcoin network,\u201d the researchers said.\u00a0<br \/>\nMacro analyst Lyn Alden reached a similar conclusion when she called Bitcoin \u201ca global liquidity barometer\u201d in a September article.\u00a0<br \/>\nAlden drew attention to the relationship between Bitcoin\u2019s price and global M2, or the broad measure of money supply across major global economies.\u00a0<br \/>\nBitcoin trades in the same direction as global liquidity more than 83% of the time. Source: Lyn AldenAs Cointelegraph reported in early March, an increase in global liquidity and a rebounding business cycle have historically had strong predictive powers for Bitcoin\u2019s price. Liquidity and business cycle trends suggest that BTC\u2019s price could be poised for a recovery in the second quarter.\u00a0<br \/>\nMagazine: Financial nihilism in crypto is over \u2014 It\u2019s time to dream big again<a href=\"https:\/\/cointelegraph.com\/news\/bitcoin-liquidity-federal-reserve-absolutely-ready-backstop-markets?utm_source=rss_feed&amp;utm_medium=rss&amp;utm_campaign=rss_partner_inbound\" target=\"_blank\" class=\"feedzy-rss-link-icon\" rel=\"noopener\">Read More<\/a><\/p>","protected":false},"excerpt":{"rendered":"<p>Source: Cointelegraph.com NewsThe US Federal Reserve is prepared to use its vast arsenal of monetary policy tools to prevent financial and economic conditions from deteriorating rapidly but will do so&hellip; <\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[5],"tags":[],"_links":{"self":[{"href":"http:\/\/cryptospotters.net\/index.php?rest_route=\/wp\/v2\/posts\/127030"}],"collection":[{"href":"http:\/\/cryptospotters.net\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/cryptospotters.net\/index.php?rest_route=\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"http:\/\/cryptospotters.net\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=127030"}],"version-history":[{"count":0,"href":"http:\/\/cryptospotters.net\/index.php?rest_route=\/wp\/v2\/posts\/127030\/revisions"}],"wp:attachment":[{"href":"http:\/\/cryptospotters.net\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=127030"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/cryptospotters.net\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=127030"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/cryptospotters.net\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=127030"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}