Countdown to Fed Rate Cuts as Markets Await Decision

The Breakdown First Five - Wednesday, September 18, 2024

Welcome back to The Breakdown First Five — the 5 most interesting and/or important stories in bitcoin, crypto, and markets to start your day.

5. USDC Integrating in Brazil & Mexico 

Circle has announced an integration into the Brazilian and Mexican payment networks. Businesses can now access USDC through their local banking partnerships in a fully seamless manner with the PIX and SPEI instant payment layers. Circle aims to eliminate the need for costly and slow international wires in global trade. Both Mexico and Brazil have massive dollarized trade, totaling almost $1.5T annually.

4. Crackdown on Pig Butchering

The US Government is getting serious about pig butchering scams. Last week the Treasury applied sanctions against a notorious Cambodian businessman, senator and pig butchering kingpin. They claim he operates multiple scam operations using human trafficking victims as his workforce. This week the SEC has filed charges against a pair of fake crypto exchanges operated by US residents, which facilitate their own fraud schemes. 

3. Dimon: Big on Blockchain

JP Morgan CEO Jamie Dimon said his bank is “one of the bigger users of blockchain.” He differentiated the bank as a “real user”, presumably compared to the massive crypto industry that uses blockchains to clear trillions of dollars of activity annually. Despite the bank growing to become a heavy user of the technology, Dimon thinks it’s nothing special, adding “it's just a database.” He is however sticking to a freedom angle, stating, “it's a free country, do what you want.”

2. Airdrop Clarity

Patrick McHenry and Tom Emmer have written to the SEC demanding clarity for airdrops. Airdrops are generally geoblocked from US investors while similar reward schemes like airline miles and credit card points have no issue with regulators. The lawmakers want the SEC to defend their position. This question, along with many others, could put Gensler on the spot as all five Commissioners prepare to give testimony next week for the first time since 2019. 

1. Countdown to Cuts

The much anticipated Fed meeting is finally here. The Federal Reserve has rate cuts locked and loaded for this afternoon. After holding rates at multi-decade highs for over two years, markets will get their first taste of accommodation. The only question is whether Powell brings out the big guns with a 50 basis point cut to get things started. Markets are still undecided, pricing in a 65% chance of a jumbo cut suggesting that volatility will be on offer either way.