CPI Opens the Liquidity Floodgates
May 17, 2024
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Flows Returning to the Market
Last week, we discussed how our base case remained that conditions for liquidity-sensitive assets like crypto would improve in the near term, and we continued to lean on our "Buy in May" thesis, given the constructive setup.
A combination of (1) a dovish Federal Reserve, (2) an accelerated tapering of quantitative tightening (QT), and (3) a Quarterly Refunding Announcement (QRA) that met investors’ expectations contributed to a decline in rates during the first couple weeks of May, alongside a rebound in crypto assets.
However, despite the drawdown in ...