I don’t think the Senate setback is the whole story. $CRCL launching Arc with BlackRock, Visa, Mastercard and DTCC involved is a meaningful development, but the market is clearly focused on the near-term regulatory and valuation risks. For me, the real question is whether Arc + growing USDC adoption can eventually outweigh that uncertainty. 👀
Fed Hikes for First Time in Three Years — Why No Market Relief?
The Fed raised 25bp to 3.75%–4.00% at 2 a.m. Beijing Wednesday, its first hike since July 2023. The result was in line and stocks still could not rally: QQQ +0.03% to $704.72, SPY −0.44% to $754.05, S&P 500 −0.45% to 7,551.81, gold +1.10%. The weight was the dot plot — 16 of 19 officials want another hike this year — and Chair Warsh saying inflation is too high, too persistent, with no clear improvement in the summer data. Morgan Stanley, JPMorgan and Goldman are still constructive on earnings and growth. But the market priced one hike; the dots say two. Has the market accepted the second one?
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