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Diplomatic efforts continue, Fed meeting begins, and fears of a crypto winter. Talking Western allies are pushing ahead with diplomatic effo [View in browser]( [Bloomberg]( Diplomatic efforts continue, Fed meeting begins, and fears of a crypto winter. Talking Western allies are pushing ahead with diplomatic efforts to [defuse tensions]( around Ukraine. Despite the ongoing talks, the U.S. seems ready for negotiations to fail as it puts 8.500 troops on alert for rapid deployment in case of an escalation by [Russia](. French and German leaders are scheduled to meet later today in Berlin to [discuss the situation](. President Joe Biden said that he had a “[great meeting](” with European leaders yesterday. Equities in the region are regaining some ground this morning after yesterday’s tumble, and [natural gas prices declined]( as shipments from Russia increased and mild weather was forecast. Hikes While the geopolitical situation is giving markets something to worry about, the main focus continues to be the [path of Federal Reserve tightening](. If nothing else, yesterday’s [very unusual U.S. trading session]( showed that uncertainty over the outlook [remains high](. While no economist surveyed by Bloomberg expects any change in policy at the two-day FOMC meeting beginning today, the post-decision press conference will be closely watched for any hints as to the pace of rate hikes. It will be key if Fed Chair Powell opens the door to [more than the three rate hikes]( projected in December forecasts. Crypto winter Bitcoin’s volatile session yesterday which saw its price briefly [drop below $33,000]( before recovering some ground is spurring fears of a repeat of the 2018 “[crypto winter](” for digital assets.  The term refers to a sharp slump followed by a drop-off in trading followed by months of market doldrums. One of the key areas of the industry coming under pressure is mining, with less efficient processors at risk of [not being able to cover electricity bills]( in the wake of the token’s 50% plunge from November’s peak. Bloomberg has launched a new crypto newsletter, the essential read on the crypto universe delivered [straight to your inbox]( twice a week. Markets mixed Global equity investors would be forgiven for waking up with whiplash this morning after yesterday’s market action. Asian markets dropped overnight, with the MSCI Asia Pacific down 1.6% and Japan’s Topix index closing 1.7% lower to [enter a correction](. In Europe the Stoxx 600 Index steadied with a 0.6% gain by 5:50 a.m. Eastern Time in a fairly broad-based move. S&P 500 futures pointed to [plenty of red at the open](, with volatility remaining elevated. The 10-year Treasury yield was at 1.785%, oil recovered [to $84 a barrel]( and gold was lower. Coming up... The November FHFA House Price Index is at 9:00 a.m. with January U.S. consumer confidence and Richmond Fed manufacturing at 10:00 a.m. The U.S. sells $55 billion of 5-year notes at 1:00 p.m. It is a huge day for corporate earnings with General Electric Co., American Express Co., 3M Co., Lockheed Martin Corp., Raytheon Technologies Corp., Microsoft Corp. and Capital One Financial Corp. among the many, many companies reporting. What we've been reading Here's what caught our eye over the last 24 hours. - Bad news for Canada’s [red-hot housing market](. - Biden bristles at Fox inflation query with [hot-mic expletive](. - NYC mayor took his [paycheck in crypto](, then Bitcoin and Ether crashed. - Strip-bar habit [worth $220,000]( hangs over Swiss banker on trial. - Venture investors’ [$1.4 billion bet on news]( faces a reality check. - McKinsey pegs the price tag of a livable climate at [$9.2 trillion a year](. - Now you can [rent a robot worker]( — for less than paying a human. And finally, here’s what Joe’s interested in this morning By now it's kind of tired to point out that there's no imminent "Fed Put." With inflation running as hot as it is, it would take something pretty extraordinary at this point for the Fed to hold off on hiking in March, with likely more hikes to follow through the rest of the year. The Fed isn't coming to the stock market's rescue, as it's perceived to have done in the past. But there's another factor at play here, beyond just elevated inflation. During past market downturns, there's usually some concern about the real economy itself. When the market tumbled at the end of 2018, there was a significant worry about a slowing housing market and a slowing auto market. In 2015 and 2016, market volatility was associated with China, and this caused the Fed to slow its post-GFC hiking cycle. So although it may have seemed as though the Fed was rescuing the market, there was in fact a threat to growth and the employment side of the dual mandate. Right now, even with the selling over the last two months, there's no big threat to growth out there. Yes, the omicron wave will have negative repercussions for data in January and February, [but economists largely expect growth to get back on track regardless](. This is evident in credit markets. Whereas the 2018 dip saw a significant increase in high yield credit spreads (the white line), the current dip has seen spreads remain extremely low. In fact they were even higher a few months ago. So yes, elevated inflation makes the Fed less likely to pivot in its hiking path, because it wants inflation to go lower. But also, right now there's not a growth scare that's associated with this decline. Follow Bloomberg's Joe Weisenthal on Twitter [@TheStalwart]( Like Bloomberg's Five Things? [Subscribe for unlimited access]( to trusted, data-based journalism in 120 countries around the world and gain expert analysis from exclusive daily newsletters, The Bloomberg Open and The Bloomberg Close. 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