Saudi Press

Saudi Arabia and the world
Saturday, Oct 04, 2025

The Fed Wants You to Lose Money in Stocks and Probably Crypto, Too

The Fed Wants You to Lose Money in Stocks and Probably Crypto, Too

The U.S. Federal Reserve’s campaign against inflation might not be finished until you’ve lost money on bitcoin (BTC).
The reason why goes back to the basics of central banking. The Fed does what it does with monetary policy (these days, raising interest rates) and that filters through the economy by impacting, among other things, how much key assets cost – “financial conditions,” in central bank jargon.

For most of this year, Fed policy makers have been sanguine toward markets like stocks, preparing traders in advance (called “forward guidance”) for upcoming changes to monetary policy. But that seems to be in the past. In July, Fed Chair Jerome Powell announced that central bankers would stop practicing forward guidance.

“It’s clear the Fed wants to see tighter financial conditions, which include lower stock prices,” Brian Overby, senior markets strategist at Ally, wrote in a note.

And that probably means crypto, too, because crypto prices have been strongly correlated with equities. That’s likely unwelcomed news for crypto investors, who’ve already suffered deep losses.

Bitcoin is already down over 57% for the year to date, according to CoinDesk data, grappling with a broader crypto asset sell-off fueled by industry bankruptcies and a struggling global macroeconomic landscape.

The U.S. central bank has two mandates: price stability and maximum employment. Right now, prices aren’t stable, with inflation running well above the Fed’s 2% goal. Meanwhile, the unemployment rate is still low and employers are adding over 300,000 jobs per month. That’s great news for job seekers but, perversely, something that could fuel inflation, raising pressure on the Fed to take even stronger action.That spells potential trouble for markets like stocks and crypto.

“The Fed wants to create a reverse wealth effect and get people that own assets to rethink some of their purchase habits and maybe slow demand,” said Jim Bianco, president of Bianco Research.

“It’s a dangerous game,” he added. “You want the market to go down, but you gotta be careful when that starts to happen because if you get everybody running for the hills because they’re going to be the enemy of the market, you could turn it into a rout.”

Even though U.S. gross domestic product has contracted for two straight quarters, the economy seems to be in good enough shape to withstand continued aggressive rate hikes. Further signs of weakness, though, will test the Fed’s resolve and force policy makers to evaluate how much pain they want to cause in markets.

“It's very possible that [the central bankers] could very well cave once they're faced with some really bad employment numbers, but they haven't been so far,” Bianco said. “I don’t think they will but I completely understand that argument.”
Newsletter

Related Articles

Saudi Press
0:00
0:00
Close
Altman Says GPT-5 Already Outpaces Him, Warns AI Could Automate 40% of Work
Trump Organization Teams with Saudi Developer on $1 Billion Trump Plaza in Jeddah
Electronic Arts to Be Taken Private in Historic $55 Billion Buyout
Colombian President Petro Vows to Mobilize Volunteers for Gaza and Joins List of Fighters
Nvidia and Abu Dhabi’s TII Launch First AI-&-Robotics Lab in the Middle East
UK, Canada, and Australia Officially Recognise Palestine in Historic Shift
New Eye Drops Show Promise in Replacing Reading Glasses for Presbyopia
Dubai Property Boom Shows Strain as Flippers Get Buyer’s Remorse
Top AI Researchers Are Heading Back to China as U.S. Struggles to Keep Pace
JWST Data Brings TRAPPIST-1e Closer to Earth-Like Habitability
UAE-US Stargate Project Poised to Make Abu Dhabi a Global AI Powerhouse
Trump and Starmer Clash Over UK Recognition of Palestinian State Amid State Visit
Saudi Arabia cracks down on music ‘lounges’ after conservative backlash
Saudi Arabia Signs ‘Strategic Mutual Defence’ Pact with Pakistan, Marking First Arab State to Gain Indirect Access to Nuclear Strike Capabilities in the Region
Sam Altman sells the 'Wedding Estate' in Hawaii for 49 million dollars
Turkish car manufacturer Togg Enters German Market with 5-Star Electric Sedan and SUV to Challenge European EV Brands
World’s Longest Direct Flight China Eastern to Launch 29-Hour Shanghai–Buenos Aires Direct Flight via Auckland in December
New OpenAI Study Finds Majority of ChatGPT Use Is Personal, Not Professional
Kuwait opens bidding for construction of three cities to ease housing crunch.
This Week in AI: Meta’s Superintelligence Push, xAI’s Ten Billion-Dollar Raise, Genesis AI’s Robotics Ambitions, Microsoft Restructuring, Amazon’s Million-Robot Milestone, and Google’s AlphaGenome Update
Indian Student Engineers Propose “Project REBIRTH” to Protect Aircraft from Crashes Using AI, Airbags and Smart Materials
Could AI Nursing Robots Help Healthcare Staffing Shortages?
Turkish authorities seize leading broadcaster amid fraud and tax investigation
Qatari prime minister says Netanyahu ‘killed any hope’ for Israeli hostages
Apple Introduces Ultra-Thin iPhone Air, Enhanced 17 Series and New Health-Focused Wearables
Big Oil Slashes Jobs and Investments Amid Prolonged Low Crude Prices
Social Media Access Curtailed in Turkey After CHP Calls for Rallies Following Police Blockade of Istanbul Headquarters
Did the Houthis disrupt the internet in the Middle East? Submarine cables cut in the Red Sea
Gold Could Reach Nearly $5,000 if Fed Independence Is Undermined, Goldman Sachs Warns
Uruguay, Colombia and Paraguay Secure Places at 2026 World Cup
Trump Administration Advances Plans to Rebrand Pentagon as Department of War Instead of the Fake Term Department of Defense
Tether Expands into Gold Sector with Profit-Driven Diversification
Trump’s New War – and the ‘Drug Tyrant’ Fearing Invasion: ‘1,200 Missiles Aimed at Us’
At the Parade in China: Laser Weapons, 'Eagle Strike,' and a Missile Capable of 'Striking Anywhere in the World'
Information Warfare in the Age of AI: How Language Models Become Targets and Tools
Israeli Airstrike in Yemen Kills Houthi Prime Minister
After the Shock of Defeat, Iranians Yearn for Change
YouTube Altered Content by Artificial Intelligence – Without Permission
Iran Faces Escalating Water Crisis as Protests Spread
More Than Half a Million Evacuated as Typhoon Kajiki Heads for Vietnam
HSBC Switzerland Ends Relationships with Over 1,000 Clients from Saudi Arabia, Lebanon, Qatar, and Egypt
Sharia Law Made Legally Binding in Austria Despite Warnings Over 'Incompatible' Values
Dogfights in the Skies: Airbus on Track to Overtake Boeing and Claim Aviation Supremacy
Tim Cook Promises an AI Revolution at Apple: "One of the Most Significant Technologies of Our Generation"
Are AI Data Centres the Infrastructure of the Future or the Next Crisis?
Miles Worth Billions: How Airlines Generate Huge Profits
Zelenskyy Returns to White House Flanked by European Allies as Trump Pressures Land-Swap Deal with Putin
Beijing is moving into gold and other assets, diversifying away from the dollar
Cristiano Ronaldo Makes Surprise Stop at New Hong Kong Museum
Zelenskyy to Visit Washington after Trump–Putin Summit Yields No Agreement
×