The US central bank is expected to raise the target federal funds rate on Wednesday for the first time since the outbreak of the pandemic. Analysts and economists are very focused on this important event as the conflict between Russia and Ukraine continues in Europe. The Federal Reserve Board has decided to raise interest rates from zero to a quarter percentage point. Investors wonder how investments in stock markets, crypto prices, and precious metals react to the news.
25 Basis Points Expected to Rise — Anxiety Revolves around Fed’s Next Move
Last week, the world monitored economic sanctions on Russia, which plunged gold prices to an all-time high of $ 2,060 per ounce. Energy stock, oil, and countless commodities have also risen significantly over the past seven days. .. Cryptocurrency markets were sluggish last week, trading volumes declined, and behavior remained flat after the short-term price hike of March 9, 2022.
Meanwhile, stocks were hit hard and indices such as NYSE, Dow Jones, S & P 500 and NASDAQ all closed in the red on Friday afternoon (EST). To make matters worse, data (CPI) reports from the US Department of Labor’s Consumer Price Index show that consumer prices hit a 40-year high in February at 7.9%.
An important event of the week for all the markets mentioned above is Wednesday. This is the first time the Federal Reserve is expected to raise benchmark bank rates since the Covid-19 pandemic, and the increase is expected to be only one-quarter. -Although it’s a point hike, investors will also wonder if the Fed will reveal a series of rate hikes for the rest of the year.
In a panel discussion on March 11, Oxbow Advisors managing partner Ted Oakley said he expects a 25 basis point increase this Wednesday.
“I want to see what happens at the Fed. Obviously, we expect the Fed to rise 25 basis points next week,” Oakley said. To settle what the Federal Reserve could do next. How do you plan this? If you’re not sure how aggressive the Fed will be, how do you position your portfolio? “
The Fed’s monitoring tools predict a 25 basis point rise, and the report shows that the futures market is forecasting a series of “aggressive” rate hikes.
CME’s FedWatch Tool also expects the US central bank to raise interest rates by 0.25 percentage points. A Bloomberg report released on Sunday further details that the Fed could become more “aggressive” after the first rate hike.
“The futures market is equivalent to a tightening of about 165 basis points, or a rise of at least six quarters this year,” said Craig Torres and Olivia Rockman of Bloomberg. Zandy said he thinks it’s a good idea to help normalize interest rates.
I think it is important to normalize interest rates in order to keep the economy expanding and avoid a recession.
Cryptographic market is dull, gold huts are 3.49%, monetary easing tactics will end
On Sunday afternoon, the price of an ounce of gold was lower than the $ 2,060 high we saw last week. Currently, an ounce of gold is being exchanged for $ 1,980 per ounce of .999 fine gold. At the time of writing, global crypto market capitalization has declined 2.6% in the last 24 hours to around $ 1.78 trillion.
The crypto market remains dull, with a few tokens that make single-digit profits on Sunday. Cryptocurrency supporters will monitor the Fed’s move on Wednesday to see if it will hurt the crypto market. As far as most reports are concerned, central banks may not raise their target Fed rate this month.
Like the futures market and the CME’s FedWatch Tool, most analysts and economists agree that the Fed’s chairman Jerome Powell and the US central bank’s monetary easing tactics are nearing the end.
“”[Jerome] Powell can’t afford to be dovish at this point. It would be inconsistent with what a sound policy is and where the policy direction is. “
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