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Dencun Upgrade Reverses Deflationary Benefits of Ethereum’s Merge
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Following the implementation of the Dencun upgrade, which significantly reduced transaction fees on the Ethereum network, ether (ETH) has reverted back to an inflationary asset, potentially undermining one of the key advantages of the 2022 Merge. A report by CryptoQuant indicates that transaction fees on Ethereum are currently four times lower than they were…
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Fully Backed Reserves: Navigating Risk in Unregulated Crypto Spaces
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The concept of “fully backed” reserves in the context of financial products such as stablecoins and depository institutions involves storing sufficient assets behind a product or account to support its value. In the case of cryptocurrency exchanges and lending institutions, the term refers to the practice of having enough funds available to cover customer…
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Stablecoins: Promoting Financial Inclusion and Requiring Regulation
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Hilary Allen, a law professor at American University, has expressed concerns that stablecoins pose a significant threat to the stability of the banking system and ultimately harm the public at large. Her views come as the US Congress considers regulating stablecoins at the federal level. While Allen suggests that stablecoins serve no practical purpose…
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2022 Tax Battle: Biden vs. GOP as Expiring Cuts Loom
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The Biden administration is emphasizing the difference in tax policies between Democrats and Republicans ahead of the upcoming presidential election. Lael Brainard, Director of the White House National Economic Council, will speak at the Brookings Institution about the significant tax challenge for whoever wins the election. The expiration of Trump’s 2017 tax cuts is…
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Fed Officials Caution Against Rate Cuts in 2024 Amid Inflation Concerns
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According to recent statements from Federal Reserve Governor Michelle Bowman and various other officials, it is unlikely that the Fed will cut interest rates in 2024, barring any unexpected economic shocks. Bowman, who expressed caution over further rate cuts during an interview and a speech in Texas, cited persistent inflation as a reason for…
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Logan Cautions Against Early Rate Cuts due to Inflation Uncertainty
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During a question-and-answer session at the Louisiana Bankers Association Annual Conference, Federal Reserve Bank of Dallas President Lorie Logan stated that it is premature to consider reducing borrowing costs due to disappointing inflation data in the initial few months of the year. Logan further mentioned that there are uncertainties surrounding how restrictive policy currently…
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UK Economy Bounces Back from Recession, but High Interest Rates Remain a Challenge
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The latest economic data has revealed that the British economy has experienced a significant turnaround in the first quarter of 2024, putting an end to the “technical recession” that had plagued the country for the past two quarters. According to figures released by the Office for National Statistics, GDP increased by 0.6% during this…
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Unique Risks and Vulnerabilities Posed by Nonbank Mortgage Companies: Implications for Financial Stability
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Nonbank mortgage companies, which now make up over two-thirds of the mortgage origination market, pose unique risks and vulnerabilities that can negatively impact financial stability, according to a report published by the Financial Stability Oversight Council (FSOC). These firms, which include Quicken Loans and Rocket Companies, differ from traditional banks in their specialized business…
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Consumer Sentiment Plunges to Six-Month Low on Inflation, Employment, and Interest Rate Fears
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In a recent report released by the University of Michigan, consumer sentiment has plummeted to its lowest point in the past six months due to mounting concerns regarding inflation, employment, and interest rates. The preliminary reading for May’s overall consumer sentiment index came in at 67.4, significantly lower than the previous month’s final reading…
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Bostic Affirms Rate Cuts Likely This Year as Inflation Nears Target, Despite Job Growth
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According to Atlanta Federal Reserve President Raphael Bostic, the US central bank is likely to follow through with rate cuts this year, despite some uncertainty surrounding the timing and extent of these adjustments. Bostic, who is also a voting member of the Federal Open Market Committee (FOMC), previously expressed confidence that interest rates could…