Inflation, Fed interest rates and black swans

Howdy all. Wanna bounce some scenarios off ya.

As a Bitcoiner, I'm used to considering the full bredth of possible outcomes from a scenario, not just what legacy financial institutions say.

​

For a while, people were saying the Fed was guarantted to pivot, and in the last couple of days that assumption seems to be changing. I see two parameters (Fed interest rates and inflation) and two possible outcomes each (up or down).

Just wanna summarise them here and see what you guys think about probability and likely effects:

1. Interest rates up, inflation up
   1. This would be the "runaway" scenario where we enter hyperinflation. If it's mild or temporary, then it's bad for Bitcoin as people to wsell to buy productive assets and bonds. Or good for Bitcoin if the whole system collapses.
2. Interest rates down, inflation up
   1. This was the prevailing narrative until recently. Good for Bitcoin. Good for debtors.
3. Interest rates down, inflation down
   1. Probably the least likely outcome, but it's possible the Fed does actually manage to get inflation quickly under control and things return to normal. Good for Bitcoin as everyone will be risk-on.
4. Interest rates up, inflation down
   1. Very unlikely as it wouldn't be a rational decision from the Fed.

In terms of how I position myself, Scenario 1 bothers me the most as Bitcoin would be flat or down and my mortgage would be up, and there wouldn't be much I could do about it.

​

What do we all think about the likely outcome, collateral damage and if/how we can protect ourselves from it?