StrategyIntermediate#Macro#Markets
FOMC (Federal Open Market Committee)
F
Definition
The branch of the Federal Reserve that determines the direction of monetary policy and interest rates in the US.
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Concept Diagram
Key Takeaways
1
The FOMC controls US interest rates — the single most powerful force affecting global crypto liquidity.
2
When the Fed pivots from rate hikes to cuts, it historically signals the start of major crypto bull runs.
3
Crypto is hyper-sensitive to the FOMC Dot Plot — even hints of policy shifts move BTC significantly.
4
While the Fed controls the Dollar, it has zero control over Bitcoin's fixed supply of 21 million.
Practical Example
In December 2023, the FOMC signals 3 rate cuts for 2024 via the Dot Plot. BTC rallies from $43k to $73k in Q1 2024 as markets front-run the incoming liquidity wave.
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Related Terms
Strategy
CPI (Consumer Price Index)A key macro metric for inflation that drives the Federal Reserve's interest rate decisions, directly impacting risk assets like BTC.
Macro
Quantitative Easing (QE)A monetary policy where a central bank purchases government securities to increase money supply and encourage lending/investment.
Macro
M2 Money SupplyA measure of the money supply that includes cash, checking deposits, and easily convertible 'near money' like savings and money market funds.
Macro
Risk-Free RateThe theoretical rate of return of an investment with zero risk, usually represented by US Treasury bills.
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