At 12:00 UTC on Monday (March 23), the Federal Reserve issued a press release to announce what several influencers in the crypto space are referring to as “Quantitiative Easing Infinity”:
Federal Reserve announces extensive new measures to support the economy: https://t.co/k5T0cvNFdm
— Federal Reserve (@federalreserve) March 23, 2020
These were two the key parts of the press release:
The Federal Open Market Committee (FOMC) will purchase Treasury securities and agency mortgage-backed securities in the amounts needed to support smooth market functioning and effective transmission of monetary policy to broader financial conditions and the economy.
Establishment of two facilities to support credit to large employers – the Primary Market Corporate Credit Facility (PMCCF) for new bond and loan issuance and the Secondary Market Corporate Credit Facility (SMCCF) to provide liquidity for outstanding corporate bonds.
This was the reaction by Anthony Pompliano (aka “Pomp”), Co-founder and Partner at Morgan Creek Digital:
Remember the $700B program the Fed announced to buy Treasuries & mortgage-backed securities last Sunday?
Remember how it was supposed to be the BIG solution?
Well they just announced they are increasing the $700 billion target to “unlimited” and will buy any type of bonds now.
— Pomp 🌪 (@APompliano) March 23, 2020
Although futures for the S&P 500 surged 55.75 points (or 2.44%) in premarket trading (since the Fed made its announcement before the opening of today’s trading session), currently (as of 14:37 UTC), the S&P 500 is down 38.59 (or 1.67%) at 2,266.33.
As for Bitcoin, according to data from CryptoCompare, although it was trading below $6K before the Fed’s announcement, within 65 minutes of the Fed’s announcement, it had reached the intraday high of $6,513, and currently (14:39 UTC) it trades at $6,268, up 3.57% in th past 24-hour period:
Binance Co-Founder and CEO Changpeng Zhao (aka “CZ”) had this to say about the Fed’s plans for unlimited quantitative easing:
Let's make an unlimited size bubble, so that it never bursts. https://t.co/BOUMA4UYII
— CZ Binance 🔶🔶🔶 (@cz_binance) March 23, 2020
Su Zhu, Co-Founder, CIO, and CEO of Singapore-based crypto-focused hedge fund Three Arrows Capital, believes that the Fed’s actions will eventually lead to such inflation that the cost of a new iPhone will reach $20,000 later in this decade:
cant wait to buy a $20k USD iphone this decade
— Su Zhu (@zhusu) March 23, 2020