FinTech Weekly Weekend Issue #2 March 26th, 2023

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Let’s recap…

  • Fed raises interest rates for the ninth time in a row
  • Markets responded negatively – but not all markets are equal (go on reading!)
  • Even Bank of America insiders suggest selling stocks – is it just news manipulation or the risk is real?

FTW Perspective

During the last FOMC meeting, many were the points covered by the Chairman Jerome Powell. All these points were related to the current banking crisis, macroeconomic conditions and how the Fed is reacting.

Markets responded negatively: stocks and cryptocurrencies experienced a dramatic fall, erasing most of the profits made by traders and investors before the meeting (March 21-22, 2023).

BofA insiders suggested selling stocks, and the question is: is all this negative news just a manipulation?

To be honest, we’ve already anticipated that the US banking crisis could have a domino effect, and that the systematic risk might hit different regions – maybe in different ways.

What the Fed is doing with higher interest rates is trying to fight the high level of inflation we’ve witnessed after the breakdown of the pandemic, rebalance a labor market that looks weak, and adjust mortgage rates that are seriously weakening the real estate industry.

But let’s get back to our question – is it just manipulation?

To answer this question, we had a look at charts and data.

To discover what we found and what Powell said, click this link:

If you want to read the full article and then get back, we’re happy to wait!

But if you want to read our short answer before reading the article, here’s what we want to say: fintech is the solution.

The current crisis showed that now, differently from the 2008 crisis, we have more tools to cope with financial troubles.

Fintech companies are working to give people and businesses some alternatives that can avoid a strong (and sometimes totally arbitrary) centralization.

Here are some key points:

Cryptocurrencies seem to be the hedge against inflation and rising rates – as the charts we analyzed told us;

Fintech companies are offering more tools to allow businesses to obtain financial relief;

Investors are focusing on decentralized solutions.

Fintech is, at the same time, the industry most affected by the crisis and the industry that can find more solutions – but it will be successful only if companies manage to keep sustainable business models.

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