Lyn Alden: Fed’s gradual policy supports scarce assets

Lyn Alden expects the Fed’s gradual balance sheet expansion to support scarce assets like Bitcoin, but not spark a dramatic rally. She advises caution and focus on quality assets.

Economist Lyn Alden forecasts that the US Federal Reserve is entering a period of gradual money printing, expanding its balance sheet in line with the growth of total bank assets or nominal GDP. This measured approach is expected to provide steady liquidity to the financial system, offering mild support to asset prices, but not the dramatic increases some in the Bitcoin community anticipate. Alden highlights the importance of holding high-quality scarce assets, such as gold and Bitcoin, while warning against overhyped sectors. She notes this strategy marks a shift from previous aggressive monetary policies, aiming for a more controlled expansion of liquidity. Additionally, market sentiment has been influenced by the nomination of Kevin Warsh as the next Fed Chair, with expectations of a more hawkish stance on interest rates. Overall, Alden views the Fed's gradual approach as supportive of scarce assets, but not a catalyst for a Bitcoin supercycle.