| Federal Reserve's Jerome Powell eyes Capitol Hill, Credit Suisse loses a key backer and cash reigns supreme among investors. — Kristine Aquino To catch up on the trading day in the UK and Europe, check out Markets Today. In testimony to lawmakers this week, Fed Chair Jerome Powell is expected to echo fellow central bankers in suggesting interest rates will go higher than policymakers anticipated just weeks ago if economic data continue to come in hot. Traders are betting the Fed will hike rates beyond the 5.1% level officials estimated in December. A hawkish tone from Powell, when he appears before a Senate panel on Tuesday and a House committee Wednesday, will likely prompt pushback from progressives warning the Fed not to inflict undue pain on the labor market. Harris Associates, Credit Suisse's biggest shareholder for many years, sold its entire stake in the lender. After cutting its 10% holding to 5% toward the end of last year, the firm exited its investment over the past three to four months, Chief Investment Officer David Herro said in an email. Separately, UBS cut employee bonuses for last year by 10% while simultaneously boosting pay for Chief Executive Officer Ralph Hamers. The bank's compensation awards cap an uneven year, with a roughly 50% decline in advisory and capital markets offsetting gains in trading and inflows in wealth management. In 2023, cash is far from trash — that's the verdict of the 404 professional and retail investors who took part in the latest MLIV Pulse survey. Against a backdrop of uncertainty over continued Fed rate hikes and a looming recession, cash looks like a safe haven — particularly with yields on short-term Treasury bills high enough to beat the classic 60/40 portfolio of stocks and bonds for the first time since 2001. "We're encouraging people that it's okay to hold cash, that it's not just a lead weight on your ankle weighing you down," said Leo Kelly, chief executive officer at Verdence Capital Advisors. S&P 500 and Nasdaq 100 futures edged lower as of 5:40 a.m. in New York. The Bloomberg Dollar Spot Index recovered from the day's lows, pressuring most Group-of-10 currencies. Treasuries eked out small gains, mirroring moves in global bond markets. Oil, gold and Bitcoin fell. At 10 a.m., we'll get factory orders and durable goods data. At 11:30 a.m., the US will sell $57 billion of 13-week bills and $48 billion of 26-week bills. The CERAWeek energy conference starts in Houston, while earnings include Nutanix and Trip.com. Here's what caught our eye over the weekend: On the brand new episode of the Odd Lots podcast, we speak with Brian Armstrong, CEO of Coinbase, the pre-eminent crypto exchange in the US. It's a conversation that covers a lot of ground, on the big challenges facing his industry right now. First there's the big bear market, as prices have come down precipitously over the last year or so. And then, as these things tend to go, the sheriffs start showing up after the price plunge, suing bad actors, and putting a further chill on industry activity. Nobody knows how far the regulatory crackdown will go, but the consensus is that law enforcement activity of various flavors has picked up quite a bit, particularly in the wake of FTX. With crypto obviously, the whole thing runs on narratives. And different narratives serve different prospective buyers. For some in retail, tokens serve as a gateway to a new decentralized web(3) where they'll own their activity, and avoid large, centralized players. For institutional investors, crypto was pitched for a while as a portfolio diversifier. And Bitcoin specifically was pitched as an inflation hedge. And neither of those things have come to pass really. You can manipulate these charts all you want, but whether we're looking at Ethereum (purple) or Bitcoin (orange), they basically have just traded like the ARKK ETF over the last 5 years. No diversification. No inflation protection. In our chat, Brian did express surprise that Bitcoin specifically didn't perform better over the last few years as a true inflation hedge. And his answer was that well, as an asset, it must still be too small to have distinct macro properties from the rest of the market. Maybe it has to grow further. But when thinking about when we'll see institutional money pouring again, obviously there's a lot of dark legal clouds. But also money chases price. And as long as the coins look mostly like high-beta tech stocks, for many investors the distinct appeal may be limited. Check out the episode on Apple, Spotify and YouTube. Follow Bloomberg's Joe Weisenthal on Twitter @TheStalwart. | 
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