Investors will focus on the US Central Bank on Wednesday as Federal Reserve policy makers are expected to aggressively raise the benchmark interest rate. Major US stock indices saw big losses at the end of the week, and the Nasdaq Composite saw its worst performance in four months since 1971. Cryptocurrency markets had a rough week as well, as the cryptocurrency economy shed 8.99% against the US dollar since April 25, down from 1.967 $1 trillion to $1.79 trillion.
Fed expects aggressive benchmark rate hike, Dutch ING Bank anticipates 50bp hike and quantitative easing announcement
A number of financial institutions, analysts, and economists are expecting the Federal Open Market Committee (FOMC) to raise interest rates next week in a bold manner. Reuters authors Lindsey Dunsmuir and Ann Savir reported on Friday that there could be “significant rate hikes by the Federal Reserve” and the authors cited two reports claiming that “severe inflation is peaking”.
The report explains: “US federal policymakers appear poised to deliver a series of sharp interest rate hikes until at least the summer to deal with severe inflation and rising labor costs, even as two reports on Friday showed initial signs that they may be peaking.”
In addition to the Reuters report, Dutch banking and financial services company ING Group believes a significant increase will come on Wednesday. In the report, ING expects the FOMC and Federal Reserve Chairman Jerome Powell to announce a 50 basis point increase. The ING report says that “inflation fears outweigh the temporary decline in GDP”.
“The Fed is widely expected to raise its policy rate by 50 basis points next Wednesday, as 8%+ inflation and a tight labor market outpace a sudden contraction in first-quarter GDP attributable to temporary trade and inventory challenges,” according to For an ING report published on April 28. Notes. While 50 basis points is a significant increase, ING also believes that the Fed will unveil a tightening plan when it comes to the central bank’s monthly bond purchases.
“We will also look forward to the Fed officially announcing quantitative tightening on Wednesday,” ING details the report.
Wall Street is losing, and gold is reaping the benefits of the overall economy
Meanwhile, when Wall Street closed on Friday, all major US stock indexes suffered a bloodbath during the daily trading sessions. The Nasdaq, the Dow Jones Industrial Average, the Standard & Poor’s 500, and the New York Stock Exchange were all down significantly before the start of the weekend. Reports It turns out that the Nasdaq has seen The start of the worst four months In over 50 years, the S&P 500 fell like a rock on Friday, too.
“By the end of trading on Friday, the selling got worse and we were staring at the worst start to a year since the Great Depression,” Barron’s author Ben Levison wrote.
Gold reaped the benefits of the storm over the weekend and the precious metal saw a steady increase against the US dollar as the weekend approaches as well. On Saturday, an ounce of pure gold rose 0.08% and 6.47% over the past six months. At present, an ounce of pure gold is exchanged at $1,896 per unit. Trend forecaster Gerald Celent believes that as long as inflation continues to rise, precious metals will follow.
“High inflation goes up, safe-haven gold and silver goes up. And when Bankster raises interest rates, it will cause Wall Street and Main Street to crash hard… And the more they go down, the higher precious metal prices will go,” Silent chirp on Saturday.
Fear Giving Bearish Market Vibes to 2018, Bitfinex Market Analysts Say Crypto Buyers Remain on the Sidelines
The cryptocurrency economy also suffered this week and the markets correlated with the stock markets. Michael van de Poppe, CEO and founder of eightglobal.com, tweeted about the fear in the cryptocurrency markets on Saturday. “The amount of fear in the markets currently due to the upcoming Fed meeting is comparable to bear market sentiment in 2018,” Eightglobal Founder She said. “This tells a lot to the markets and Bitcoin.” On Saturday evening (Eastern time) around 7:25 PM Bitcoin (BTC) dropped below $38,000 to $37,597 per unit.
Since April 25, 2022, the net worth of the entire crypto-economy has fallen from $1.967 trillion to $1.79 trillion today. While the cryptocurrency economy has lost 8.99% since then it has lost 1.2% in the past 24 hours. Bitcoin (BTC) is down 4.9% this week and Ethereum (ETH) has lost 7.6% against the US dollar over the past seven days. In a note sent to Bitcoin.com News on Friday, Bitfinex market analysts explained that “Bitcoin is in a limited trading range as buyers remain on the sidelines.”
The analysts added: “A tight trading day of closing symptoms – which has seen so-called MIM stocks pumped into off-ground valuations – already looks like a thing of the past.” “Robinhood is cutting staff amid a drop in revenue as bearish sentiment takes hold in the stock market. However, it is interesting to note that the percentage of bitcoin supply that has been idle for a year or more hit an all-time high this month, according to data from the analytics firm on Glassnode Series”.
What do you think of the outlook for global markets such as gold, cryptocurrencies, and stocks? Do you think the Fed will raise the benchmark interest rate by 50 basis points? Tell us what you think about it in the comments section below.
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