Investors predict that the feds are expected to hike interest rates this week. It will be a huge event and can affect the equity, crypto, and gold market. Analysts are keeping a close eye on how the prices will react as this is the first time since the pandemic began that interest rates are being targeted. This is necessary as the Russia-Ukraine war situation is expected to worsen inflation. Moody’s Analytics chief economist Mark Zandi said:
“To ensure that the economy continues to expand and avoid recession, I do think that it’s important to normalize interest rates.”
Feds are expected to hike interest rates this week
A hike of around 25 basis points is expected, which isn’t that much but still a start. The price of gold has recently reached a new ATH at $2060. At the same time, because of the sanctions on Russia, commodities like oil are also seeing a huge price hike. Cryptocurrencies, on the other hand, are stuck at the same level for quite a while now. All this could change with the fed’s latest step. A market correction often follows an increase in interest rate.
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Inflation has already hit a 40-year high at 7.9%, and this led to the step of the interest hike. Now the main question is whether the feds announce multiple interest rate hikes for the rest of the year. If they do, then the market will adjust before that hikes happen. Let’s see how the markets react for now on the first one.
Crypto is struggling
While inflation is considered the best friend of cryptocurrencies, it has been struggling for quite a while despite high inflation numbers. Now, with the increase in interest rates, the price of digital assets could take further hits. It is difficult to say how much the effect will be, but it won’t be positive, that’s for sure. At present, the price of Bitcoin is around $38.5k, and it has recently made a low at $37.5k. Altcoins are also struggling, with most of them much below their ATH, with a few exceptions.
What are your thoughts as Feds are expected to hike interest rates this week? And do you think this will happen multiple times this year? Let us know in the comments below. Also, if you found our content informative, do like and share it with your friends.
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