Fed Liquidity Growth Could Boost Interest in Risky Assets

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by Giorgi Kostiuk

2 years ago


Fed liquidity has increased by $395 billion since the beginning of the year, potentially boosting interest in risky assets like cryptocurrencies and stocks.

Fed Liquidity Surge

Since the start of the year, Federal Reserve liquidity has increased by $395 billion, marking the largest ten-day hike in two years. This could potentially reignite interest in riskier assets.

Impact on the US Economy

Recent market-wide crashes have highlighted a growing ‘inverse’ correlation between macro trends and riskier assets. If the U.S. economy continues to show strength, the crypto market could take an unexpected turn.

Inverse correlation between macro trends and riskier assets is growing.

Market Speculations

As the US approaches its debt ceiling, liquidity injections from the Treasury General Account may occur. Increased liquidity from both the Fed and the US government injects fresh capital into the market. However, with the debt ceiling fast approaching, investors may turn towards more stable assets.

The surge in liquidity may boost interest in risky assets, but investors should closely monitor economic conditions and administration measures.

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