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- The Federal Reserve of the United States is likely to raise its target fed funds rate on Wednesday for the first time since the outbreak of the epidemic.
- CME’s Fed Watch Tool predicts that the US central bank will raise interest rates by 0.25 percentage points.
As the Russia-Ukraine crisis rages on in Europe, analysts and economists are riveted on this pivotal event. If the Federal Reserve decides to raise interest rates by a quarter percentage point from zero, investors are wondering how stock markets, cryptocurrency prices, and assets such as precious metals would respond.
Is this end of Bitcoin?
The world watched last week as financial penalties were imposed on Russia, and the price of gold reached an all-time high of $2,060 per ounce.
Energy stocks, oil, and a variety of commodities have all seen significant price increases in the recent seven days. Cryptocurrency markets were uninspiring last week, with volume down and activity remaining flat following a small price increase on March 9, 2022.
Stocks, on the other hand, suffered significantly, with indices such as the NYSE, Dow Jones, S&P 500, and Nasdaq all closing the day in the red on Friday afternoon (EST). To make matters worse, the Consumer Price Index (CPI) report from the United States Labor Department showed that consumer prices reached a 40-year high of 7.9 percent in February.
An increase of 25 points
CME’s Fed Watch Tool predicts that the US central bank will raise interest rates by 0.25 percentage points. According to a Bloomberg story published on Sunday, the Fed may become more “aggressive” following the first-rate rise.
Fed Watch Tool Predicts a 25 Basis Point Increase, and Futures Markets Predict an ‘Aggressive’ Series of Rate Hikes, according to a report.
According to Bloomberg’s Craig Torres and Olivia Rockeman, “futures markets show approximately 165 basis points of tightening this year or the equivalent of at least six quarter-point rises.” Moody’s Analytics chief economist Mark Zandi told the House Financial Services Committee on Tuesday that he believes it is a good idea to continue forward with rate normalization.
The reaction of crypto investors
The cryptocurrency markets are dull, gold is down 3.49 percent, and monetary easing tactics are coming to an end.
On Sunday afternoon, the price of one ounce of gold was lower than the previous week’s high of $2,060. An ounce of gold is presently worth $1,980 per ounce .999 pure gold. The worldwide crypto market value is now hovering around $1.78 trillion, down 2.6 percent in the previous 24 hours.
The crypto markets remain dull, with only a few coins gaining in the single digits on Sunday. Supporters of digital currencies will be following the Fed’s decision on Wednesday to see whether it has a negative impact on crypto markets. According to most reports, there is little likelihood that the central bank will not raise its target fed funds rate.
ALSO READ: Investors should know how to read crypto charts
Nancy J. Allen is a crypto enthusiast, with a major in macroeconomics and minor in business statistics. She believes that cryptocurrencies inspire people to be their own banks, and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning. She frequently researches, and posts content on the top altcoins, their theoretical working principles and technical price predictions.
