The Latest News - The Federal Reserve May Look More Dovish in 2024

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 Hello McFinancers!

The latest in financial news: The latest news from the Federal Reserve shows that they may be lowering rates, the SEC is reviewing spot Bitcoin ETFs again, and a hack with Ledger has led to an outcry in having Ledger open its source code for reviews.

The Federal Reserve May Become Dovish

The Federal Reserve had its Federal Open Market Committee (FOMC) meeting this week on the 12th and 13th of December. In summary, the FOMC is the main body that decides and controls the Federal Reserve’s monetary policy. In summary, their latest statement from the meeting talks about the strength of the US banking system being strong and that the recent tightening is going to affect American households and businesses regarding unemployment, economic activity, and inflation. The statement also talks about how the committee is committed to achieving a 2% inflation rate and that they will maintain the current interest rates as they continue to review new data on the effects to determine future adjustments.

After reading the statement, in summary, the point is that the Federal Reserve is striving to maintain the 2% inflation rate and that they will raise or lower the interest rates until they get it. This has caused many investors to think that the Federal Reserve is turning more dovish (lowering interest rates) in 2024. The lowering of interest rates has typically led to business and economic growth as businesses can take cheaper loans to grow which leads to more jobs. This helps reduce unemployment and leads to greater economic activity from consumers. We can only see what the future has for US interest rates and news from the Federal Reserve.

SEC Continues To Review Spot Bitcoin ETFs

The Securities and Exchange Commission (SEC) is continuing to review the applications for a spot Bitcoin ETF. This is driven by the ruling in October about the SEC denying Grayscale’s application to convert their existing Bitcoin trust into a spot ETF. The US Court of Appeals was the court system that issued the SEC to review the application since they have approved Bitcoin futures using similar structures of holding/storing Bitcoin. SEC Chair, Gary Gensler, continues to argue against allowing a spot Bitcoin ETF due to notorious actors and fraud in the ecosystem.

The long-awaited spot Bitcoin ETF is slowly making its way through the US government bureaucracy. With big names like Fidelity and Blackrock backing the ETFs, it is only a matter of “when” the ETF is approved and not “if” it is approved. The ETF will allow many people access to Bitcoin and lead to the introduction of other cryptocurrencies. When someone tweeted a fake alert about the spot ETF getting approved, it shot the price of Bitcoin up to about $30,000. It shows the impact that the spot Bitcoin ETF will have on the price of Bitcoin. We are excited to see when the ETF is approved and how it will be incorporated into retirement accounts in the US.

Ledger Devices Hacked

Over the week, Ledger had a hack on the front end of interacting with decentralized applications (DApps). Ledger has said that they have fixed the hack. The hacker was able to replace the code with their malicious version that affected multiple DApps including Sushiswap and Phantom. This incident has caused many people to request that they open their source code to allow people to review and suggest improvements to the code. With the idea of crypto being open and available to everyone, it would make sense that companies involved in crypto should be open about their products. It would help them improve their code and increase their popularity among crypto users.

This hack leads to another important thing for crypto users and that is security. It is important to remember that as you get more freedom and control of your digital assets there are things you need to do to protect them. Using a hardware wallet to store your digital assets is good as it requires you to verify your transactions using the device (e.g. Ledger or Trezor). Over the past year, there have been projects that have been working on improving the security of users. De.Fi has an auditing tool for smart contracts that reviews and provides details about the project. They can help identify potential projects that are rugpulls or scams. Another major advocate is Harpie.io as they have created a RPC node on Ethereum that constantly scans and prevents transactions to known scammers. They have helped protect millions of dollars and ensure that we are making the crypto ecosystem safer for people. It is important to have multiple layers of security to protect yourself. Just like your computer has multiple layers of security with a firewall, antivirus software, and VPNs.

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