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I'd replace the 'as' with 'if' above. I'm not convinced the Fed has the guts to significantly tighten monetary policy at this point. It's not just the NFT market that would crash, it's stocks and real estate as well - followed by a pretty significant recession.

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It is easy to forget that the Fed was already tightening monetary policy over a period of years prior to the COVID crash, and only loosened policy in response to the economic impact of COVID. The Fed has historically not been shy about triggering corrections, crashes, and recessions if that is what it takes to achieve their targets, and I am not sure why anyone would think they will behave any differently this time around. Certainly the bond markets have reacted in a way that suggests that participants there take the Fed at their word that interest rate hikes are coming over the next 12 months.

Yeah it will set off a major financial correction and temporary crisis in the markets, but the alternative, letting the status quo of negative interest rates drive further inflation, will lead to a historic economic crisis. SME failures and a general breakdown of social order.

Worst case scenario, they wait too long to raise rates and only do it as a knee-jerk reaction to an unfolding economic crisis that threatens to destabilize the entire USA. Then we get a full-spectrum crisis.

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