Crypto: Federal Reserve, FDIC, OCC release joint statement on monitoring liquidity

Yahoo Finance’s Jennifer Schonberger joins the Live show to discuss how markets and the crypto space are reacting to Fed remarks.

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- Markets alongside the world of crypto still watching recent comments from the Fed, with San Francisco's Fed President Mary Daly and Atlanta Fed President Raphael Bostic wrapping up ongoing remarks. Meanwhile, the Fed out with recommendations on crypto deposits. Here are the latest. Yahoo Finance's Jennifer Schonberger. Hey, Jen.

JENNIFER SCHONBERGER: Good morning. The Federal Reserve, the FDIC, and the OCC all out with a joint statement this morning, encouraging banks that host deposits from crypto firms to monitor liquidity and ensure that there are proper risk management practices in place to guard against runs.

Those agencies warning that the deposits that the banks are hosting could be susceptible to great stress in markets and volatility. Now, while these agencies are encouraging using existing risk management practices, they are not requiring new standards be put in place.

Specifically amongst those recommendations, understand what could impact deposits from crypto firms and how susceptible those deposits are to volatility, assess interconnectedness across deposits from crypto assets and liquidity risks, and have a contingency plan in place and stress test that liquidity and really monitor those crypto deposits.

Now, separately, we're just hearing from Atlanta Fed President Raphael Bostic, who was speaking in Atlanta, who happened to mention in conversation with former Kansas City Fed president Esther George that they need to be careful to expand the reach of fintech in the financial system, especially as it relates to payments, and that's one of the reasons why the Fed has been slow to open up the payment system to crypto and fintech so rapidly. Rachelle.

- And certainly, crypto wasn't something I'm sure the Fed was anticipating they would have to be covering as well. And of course, we're also tracking comments from Treasury Secretary Janet Yellen. What's the latest there?

JENNIFER SCHONBERGER: That's right, Rachelle. Treasury Secretary Janet Yellen speaking overnight in Bengaluru, India as she is on the ground there for the G20, hosting a press conference. Yellen's saying the global economy is in a better place today than predicted months ago and that the US economy has been resilient with inflation moderating over the past couple of months and the job market remaining strong.

She said, quote, that "policymakers need to be attentive to the spillovers of macroeconomic tightening from major economies to the rest of the world." And she says "while there's much work to do, we're beginning to see lower headline inflation around the world." She said, in emerging markets, financial conditions remain relatively tight but have begun to show signs of easing.

Now, ahead of that one-year anniversary tomorrow of Russia's invasion of Ukraine, Secretary Yellen standing in solidarity with Ukraine, reiterating the US's support, saying that we will be in the fight with Ukraine for as long as it takes. Rochelle.

- All right. Thank you for that update. Jennifer Schonberger there for us.