Investors will focus on the US central bank on Wednesday as Federal Reserve policymakers are expected to aggressively raise the benchmark interest rate. Major U.S. stock indices posted significant losses at the end of the week, and the Nasdaq composite posted its worst four-month start to performance since 1971. Crypto markets also had a difficult week, as the economy crypto lost 8.99% against the US dollar since April 25, falling from $1.967 billion to $1.790 billion.
Fed set to hike benchmark interest rate aggressively, Dutch bank ING forecast 50bp hike and QE tightening announcement
A number of financial institutions, analysts and economists expect the Federal Open Market Committee (FOMC) to raise interest rates aggressively next week. Reuters authors Lindsay Dunsmuir and Ann Saphir reported on Friday that there could be “big Fed rate hikes ahead” and the authors also cite two reports that say “inflation has peaked ”.
“US Federal Reserve policymakers appear poised to offer a series of aggressive interest rate hikes at least through the summer to address high inflation and soaring labor costs, although two reports released on Friday showed tentative signs that both could peak,” the report explains.
In addition to the Reuters report, the Dutch multinational banking and financial services company ING Group believes that a sharp rise will take place on Wednesday. In the report, ING expects FOMC and Fed Chairman Jerome Powell to announce a 50 basis point hike. ING’s report says “inflation concerns are outweighing the temporary decline in GDP”.
The Federal Reserve is expected to raise its benchmark rate by 50 basis points next Wednesday as +8% inflation and a tight labor market outweigh a surprise first-quarter GDP contraction attributed to temporary trade challenges. and stocks”, ING group report published on April 28. Remarks. While 50bps is a significant increase, ING also believes the Fed will unveil a tightening plan when it comes to monthly central bank bond purchases.
“We will also be looking for the Fed to formally announce quantitative tightening on Wednesday,” the ING report details.
Wall Street takes a beating, gold reaps macro benefits
Meanwhile, when Wall Street closed Friday, all major U.S. stock indexes had suffered a bloodbath in intraday trading sessions. The Nasdaq, Dow Jones Industrial Average, S&P 500 and NYSE all fell significantly before the start of the weekend. Reports show that the Nasdaq composite saw its worst start to four months in over 50 years and the S&P 500 also fell like a rock on Friday.
“By the end of trading on Friday, the selloff had worsened and we were witnessing the worst start to the year since the Great Depression,” wrote Barron author Ben Levisohn.
Gold reaped the rewards of the weekend storm and the precious metal also saw a steady rise against the US Dollar ahead of the weekend. Saturday, the ounce of fine gold is up 0.08% and 6.47% over the last six months. Currently, one ounce of fine gold is trading for $1,896 per unit. Trend forecaster Gerald Celente thinks that as long as inflation rises, precious metals will follow.
“The more inflation rises, the more gold and silver in safe-haven assets rise. And, when the Banksters raise interest rates, it will bring Wall Street and Main Street down very hard…and the more they fall, the more the prices of precious metals will rise,” Celente tweeted the Saturday.
Fear Gives ‘2018 Bear Market Vibe’ Says Bitfinex Market Analysts Crypto Buyers Stay Away
The crypto economy also suffered this week and the markets were correlated with the equity markets. CEO and founder of eightglobal.com Michaël van de Poppe tweeted on Saturday about the scare in the crypto markets. “The degree of fear in the markets currently due to the upcoming FED meeting is comparable to the bear market vibrations in 2018,” said the founder of Eightglobal. mentioned. “That says a lot for the markets and Bitcoin.” On Saturday evening (ET) around 7:25 p.m., bitcoin (BTC) fell below the $38,000 mark to $37,597 per unit.
Since April 25, 2022, the net worth of the entire crypto-economy has grown from $1.967 trillion to $1.79 trillion today. While the crypto-economy has lost 8.99% since then, it has lost 1.2% in the past 24 hours. Bitcoin (BTC) has lost 4.9% this week and Ethereum (ETH) has lost 7.6% against the US dollar over the past seven days. In a note sent Friday to Bitcoin.com News, Bitfinex market analysts explained that “bitcoin is in limited trade as buyers stay away.”
“The day trading fervor symptomatic of the lockdown – which has seen so-called meme stocks pump to supernatural valuations – already seems to be a thing of the past,” the analysts added. “Robinhood has cut its workforce amid falling revenue as bearish sentiment sets in in the stock market. Still, interestingly, the percentage of bitcoin supply dormant for a year or more hit new all-time highs this month, according to data from on-chain analytics firm Glassnode.
What are your thoughts on the outlook for global markets like gold, crypto, and stocks? Do you think the Federal Reserve will raise the benchmark rate by 50 basis points? Let us know what you think about this topic in the comments section below.
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With ‘Aggressive’ Fed Rate Hike Expected Next Week, Stocks And Crypto Markets Lose Billions – Reuters
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