Bitcoin & Crypto | Commodities | Global | Monetary Policy & Inflation
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Summary
- The EU could be out of gas by November if Putin severs supply.
- Oil just fell off a cliff.
- Bitcoin adoption is in a slump.
- Fed hiking hits employment hardest in poor cities.
If Putin Cuts Supply, the EU May Run Out of Gas by November
Russia has cut piped gas supply to the EU by almost two thirds since the war in Ukraine began. With scheduled pipeline closures looming, worries about a total stop have increased. If consumption patterns remain unchanged and Russian gas stopped now, the EU may run short of gas before the end of the year (Chart 1). We explore the market implications here.
Oil Drops, Massively
Oil prices plunged 10% on Tuesday – the seventh-largest drop since 2009 (Chart 2). Other risk markets also fell, but not by as much. While an oil price decline on recession fears could be expected, the magnitude was unexpected. This fits into a larger theme of the market undergoing a regime change.
Bitcoin Adoption Is in a Slump
The ‘number of new entities’ is a metric that describes how many unique entities appeared for the first time in a transaction of bitcoin on the bitcoin blockchain. Therefore, it can be used as a measure of new user adoption/growth. This metric, as well as the number of active addresses, has been declining throughout the drawdowns (Chart 3).
How Fed Hikes Hit Employment: Rich vs Poor
A new Federal Reserve Bank of Cleveland working paper examines the inflationary and employment responses of different US cities to interest rate rises. It finds inflation declines faster in poorer cities than wealthier ones, but at the cost of greater employment losses (Chart 4). Today’s Deep Dive explores more.