Against the backdrop of prevailing market expectations, the Federal Reserve is poised to implement another rate hike in November, according to Pat LaVecchia, CEO of Oasis Pro.
During the Federal Reserve’s September meeting, the institution signaled a more aggressive stance, indicating that interest rates would remain elevated for an extended period due to stronger-than-anticipated economic growth. This suggests that the current cycle of monetary tightening is far from over, LaVecchia informed Kitco News.
According to a report by Kitco News, LaVecchia made these comments while attending the Mainnet Conference held in New York City from 20 to 22 September. He stated that despite statistical indicators suggesting otherwise, the next rate hike is likely to happen in November. He also mentioned that 2024 would be a period of stability in terms of interest rates. As for rate cuts, LaVecchia does not foresee any until 2025, although he did not dismiss the possibility of a soft economic landing in the future.
On the subject of investments, LaVecchia is closely monitoring developments in the tokenization of assets, particularly U.S. Treasuries. Tokenization allows for the digital representation of real-world assets like real estate, commodities, and U.S. Treasuries on the blockchain, making them more easily tradable and accessible. LaVecchia revealed that over a billion dollars’ worth of U.S. Treasuries have already been tokenized, attracting interest from crypto funds seeking safe returns in the digital asset space.
LaVecchia also highlighted the current attractiveness of tokenized U.S. Treasuries, given that the yields on 10-year U.S. Treasuries have reached 15-year highs at 4.68%. He suggested that this could open up the Treasury market to accredited and retail investors, thereby increasing demand for U.S. debt instruments.
Looking ahead, LaVecchia believes that the tokenization industry has significant growth potential. While Citibank estimates the industry to be worth around $10 trillion in a decade, LaVecchia considers this a conservative figure and expects it to be much higher. He noted that the market for tokenized real-world assets has already expanded from $300 million last year to billions this year.
LaVecchia also briefly mentioned his views on the 2024 U.S. elections and their potential impact on crypto regulation. However, he did not expect any significant changes in crypto regulation for the next 18 to 24 months.
Featured Image via Midjourney