Liquidity (in ETH): Markets are most attentive to this week’s FOMC meeting. A year ago, the FOMC projected a policy rate of less than 1% for the end of end-2022, a shock-and-awe distance from the 4.4% expected after this week’s 50bp rate hike. The root of the more rapid tightening is well known – inflation is running hot. Core PCE will settle around 5% in the fourth quarter, another moonshot from FOMC projections. The surge in rates has led to a big downside surprise in rate-sensitive activity. GDP growth is running less than 1% this year versus the 4% projected a year earlier. Yet, the FOMC nailed the labor market, with the unemployment rate holding near cycle lows. This paints a simple picture – weak labor productivity is eating into corporate profit margins and weighing on risk assets. Digital asset markets were especially sensitive. But like the FOMC, liquidity conditions are thawing in digital. The ETH-OMC, the meeting of All Core Developers (ACD), has stayed on an unwavering strategic path, having executed the migration to proof-of-stake in the Fall. But it begged the question – when will staked assets be liquid? The Dec 8 ACD meeting made it clear that the priority for the Shanghai upgrade is bringing liquidity to staked ether. Any protocol improvements that aren’t ready for client testing on Jan 5th will be dropped from the Shanghai upgrade. ETH staked assets will be eligible for withdrawal no later than March 2023, just in time for the expected peak in US policy rates. Digital tailwinds are building from both macro policy and core developers.