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The Federal Reserve has an explicit mandate to stabilize prices but over the past 55 years every Fed Chair has expanded the money supply leading to persistent inflation.Source: River

BoJ Hike, Yen Weakness, and the Surprise Rate Check18 September was a remarkable day for JPY. The BOJ raised rates by 25bp to 1.25%, yet USD/JPY initially moved higher, before reversing sharply following Nikkei reports of BoJ rate checks.The first point worth emphasizing is that the BoJ's rate hike was by no means dovish. The Bank raised its policy rate by 25bp to 1.25%. Coming just 3 months after the June meeting, the move marked a clear acceleration in the pace of policy normalization compared with the previous pattern of roughly one rate hike every 6 months. Governor Ueda also stated during his press conference that "the phase of monetary policy has changed," signalling that the BoJ is moving away from maintaining highly accommodative conditions and toward a stronger focus on containing inflation.So why did the yen weaken?Part of the answer is that expectations had become too elevated. Following recent comments from U.S. Treasury Secretary Bessent, some investors may have priced in a much broader shift in Japan's policy framework. Instead, the BoJ delivered a conventional 25bp hike, while the cabinet reshuffle offered little evidence of a major change in Japan's fiscal stance.The two dissenting votes from Board members Asada and Sato also attracted attention. While their opposition to the rate hike was not a complete surprise, it highlighted divisions within the BoJ at a time when both the ECB and the Fed had been delivering rate increases with unanimous vote. In addition, Governor Ueda clearly distanced himself from market speculation about back-to-back hikes or a larger 50bp move that had gained traction following Board member Takata's speech in early September. Takata himself did not advocate a 50bp hike, and the hawkish surprise that some market participants had anticipated ultimately failed to materialize.USD/JPY briefly traded in the 158s before reports of BoJ rate checks triggered a sharp reversal.The timing was notable. With Japan entering a five-day holiday period, liquidity conditions are likely to thin, increasing the risk of speculative moves. The rate checks appeared aimed at reminding markets that the authorities are not comfortable with a renewed move toward 160.The yen's weakness can partly be explained as a correction of overly optimistic policy expectations. At the same time, the fact that rate checks were deemed necessary on the very day the BoJ raised rates may reinforce market perceptions of the yen's underlying structural weakness. On the other hand, the move also demonstrated that the authorities are not prepared to tolerate an excessively rapid depreciation of the currency. During next week's holiday period, the market is therefore likely to be caught between persistent depreciation pressures and heightened intervention concerns. #Japan #BoJ #USDJPY

Five bearish headlines in one week. Bitcoin is still up.The CLARITY Act stalled in the Senate. The Fed and Bank of Japan raised rates. The dollar index climbed back above 100. Oil kept rising.That is a difficult backdrop for a risk asset. Yet Bitcoin remains above where it started the week.We saw a similar pattern in 2023. SEC lawsuits, questions over whether major altcoins were securities, delays to a spot Bitcoin ETF and further Fed hikes all hit sentiment. Bitcoin absorbed the news without making a new low.That does not prove a bottom is in. But when bad news stops pushing prices lower, it is worth paying attention.The headlines are bearish. The price action is telling a different story.Source. Bull Theory