[Medium Note] FOMC Preview & Plan

Scenario analysis & decision matrix: an important update to previously disclosed views

Executive Summary -

It is FOMC day. Consistent with guidance released in earlier write-ups / streams this September, BTC has been either the best performing, or second best-, instrument cross-assets since a) Labor Day, b) last Monday & c) this Monday - from 109K/112K/115K at these intervals until here @ BTC sitting at ~117K.

See below:

As such - despite all the fanfare made from gold/silver - BTC has more or less “caught up.” No longer lagging - this reflects a fairer shake at some of the tailwinds discussed earlier in the month. As a reminder, these drivers are/were:

1) an incoming policy mistake that over-focuses on weakening labor demand instead of the stickier issue, which is inflation. Most real-time indicators (credit spreads, consumer debt availability, IPO/M&A tick-ups, etc.) have the business cycle performing very strongly; we believe it is probable that the slow-down here could therefore be transient, and does not warrant a cut. Given the dialogue from Jackson Hole however, we are refreshed with guidance that the Fed is much more keen on evaluating labor DEMAND vs. other metrics (inclusive of labor SUPPLY); hence why the market has priced in a near-100% chance that a cut is incoming today. We recognized this - and so despite our own ideological waxes - we ideated that the path would convert from “flat/25 bps” to “25/50 bps” as incoming data prints developed (NFP, PPI/CPI, etc).