Quick Take
Result of Powell Speaking
- The US 10-year minus 02 years has reached -100 bps inversion.
- The forward growth outlook is a full percentage point lower than the expected policy rate.
- Levels of policy error not achieved since February 1980.
- Inversion points to a recession, but a larger inversion doesn’t not mean a faster or deeper recession.
- While the terminal rate is now forecasted at 5.6% for October 2023 and a 60% probability of a 50bps rate hike during the March FOMC meeting.
Result of Grayscale vs. SEC hearing
- So far, GBTC is up roughly 9% today due to the current hearing, Grayscale vs. SEC.
- The discount to NAV is roughly 40%, which assumes Grayscale’s chances of a spot ETF have increased.
- The gap was as narrow as -35%.
- GBTC would have a pathway to convert to NAV.
- BTC remains roughly flat for the day at $22,300
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Main content of the article:
The US yield curve inversion has deepened with the 10-year minus 2-year reaching -100 bps following comments from US Federal Reserve Chair Jerome Powell. The inversion is seen as a recession indicator, though a larger inversion doesn’t necessarily indicate a deeper or faster recession. Meanwhile, GBTC, Grayscale’s Bitcoin Investment Trust, was up about 9%, with its discount to NAV narrowing to roughly 40%. The increase followed a hearing on the Securities and Exchange Commission’s dealings with Grayscale, with the discount implying greater chances of a spot ETF for GBTC.
