With an ‘aggressive’ Fed rate hike expected next week, stocks and crypto markets lose billions – Market Updates Bitcoin News

Investors will be focused on the Federal Reserve this Wednesday as Federal Reserve policymakers are expected to aggressively raise the benchmark interest rate. Major US stock indexes posted significant losses at the end of the week, and the Nasdaq Composite posted its worst four-month starting performance since 1971. Crypto markets also had a rough week as the crypto economy lost 8.99% against the US Dollar down from $1.967 trillion to $1.79 trillion since April 25.

The Fed expects an aggressive hike in benchmark interest rates, Dutch bank ING is forecasting a 50 basis point hike and an announcement of tightening quantitative easing

A number of financial institutions, analysts and economists expect the Federal Open Market Committee (FOMC) to aggressively hike interest rates next week. Reuters contributors Lindsay Dunsmuir and Ann Saphir reported on Friday that “big Fed rate hikes may be imminent,” and the authors also cite two reports claiming “hot inflation is peaking.”

“Federal policymakers are expected to conduct a series of aggressive rate hikes at least through the summer to deal with hot inflation and rising labor costs, although two reports on Friday showed tentative signs that both could be peaking,” it said the report.

A report by James Knightley, ING’s chief international economist, said: “For now, our base case remains that the Fed will add 50bps to the 50bp hike next week in June and July before switching to 25bps , when the quantitative tightening increases speed. We see the fed funds rate peaking at 3% in early 2023.”

Adding to the Reuters report, Dutch multinational banking and financial services conglomerate ING Group believes a big hike is coming this Wednesday. In the report, ING expects FOMC and Fed Chair Jerome Powell to announce a 50 basis point hike. The ING report states that “inflation worries outweigh the temporary GDP slump”.

“The Federal Reserve is widely expected to hike interest rates by 50 basis points next Wednesday as inflation above 8% and a tight labor market trumped the surprise contraction in Q1 GDP attributed to temporary trade and inventory concerns is,” reads the ING Group report published on April 28 Notes. While 50 basis points is a big hike, ING also believes the Fed will announce a tightening plan when it comes to the central bank’s monthly asset purchases.

“We will also wait for the Fed to formally announce quantitative tightening on Wednesday,” detailed the ING report.

Wall Street takes a beating, gold reaps the macro benefits

As Wall Street ended Friday, all major US stock indexes had suffered a bloodbath during 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 had its worst four-month start in over 50 years and the S&P 500 also fell like a stone on Friday.

“By the close of trading on Friday, the sell-off had worsened and we were staring at the worst start to a year since the Great Depression,” wrote Barron’s author Ben Levisohn.

Friday’s gold prices rose after stock and crypto markets took a hit.

Gold benefited from the late-week storm and the precious metal continued to post steady gains against the US dollar into the weekend. On Saturday, fine gold an ounce is up 0.08% and 6.47% over the past six months. An ounce of fine gold is currently trading at $1,896 per unit. Trend forecaster Gerald Celente believes precious metals will follow as long as inflation rises.

“The higher inflation rises, the higher the safe-haven assets gold and silver rise. And when the banksters raise interest rates, it’s going to bring down Wall Street and Main Street very hard…and the harder they fall, the higher bullion prices will go,” Celente tweeted Saturday.

Fear Gives “2018 Bear Market Vibes,” Market Analysts At Bitfinex Say Crypto Buyers Are Staying On The Sidelines

The crypto economy also suffered this week and the markets correlated with the stock markets. The CEO and founder of Eightglobal.com, Michaël van de Poppe, tweeted about the fear in the crypto markets on Saturday. “The level of fear in the markets right now due to the upcoming Fed meeting is comparable to the bear market sentiment of 2018,” said the founder of Eightglobal. “That says a lot about the markets and bitcoin.” Bitcoin (BTC) fell below $38,000 at around 7:25 p.m. Saturday evening (ET) to $37,597 per unit.

BTC/USD 1 hour chart as of April 30, 2022.

Since April 25, 2022, the net worth of the entire crypto economy has slipped from $1.967 trillion to $1.79 trillion today. While the crypto economy has lost 8.99% since then, it has lost 1.2% over the past 24 hours. Bitcoin (BTC) is down 4.9% this week and Ethereum (ETH) is down 7.6% against the US dollar over the past seven days. In a note sent to Bitcoin.com News on Friday, Bitfinex market analysts stated that “Bitcoin is in range bound trading as buyers stay on the sidelines.”

“The passion for day trading that is symptomatic of the lockdown – during which so-called meme stocks have been pumped to skyrocketing valuations – already seems to be a thing of the past,” the analysts added. “Robinhood has cut staff amid a drop in sales as bearish sentiment takes hold in the stock market. Still, it’s interesting to note that 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.”

tags in this story

Ann Saphir, Bank Rate, Ben Levisohn, Bitfinex Market Analysts, Central Bank, Crypto, Crypto Markets, Dow Jones, Fed Chair Jerome Powell, Fed Politician, FOMC, Gerald Celente, Gold, Great Depression, Inflation, ing, ING Group, Interest Rates Rate Hikes , James Knightley, Lindsay Dunsmuir, Michaël van de Poppe, Nasdaq, NYSE, rate hike, S&P 500, trend forecaster

What are your thoughts on the prospects for global markets like gold, crypto and stocks? Do you think the Federal Reserve will raise interest rates by 50 basis points? Let us know what you think about this topic in the comment section below.

Jamie Redman

Jamie Redman is the news director at Bitcoin.com News and a Florida-based financial technology journalist. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for bitcoin, open source code and decentralized applications. Since September 2015, Redman has written more than 5,000 articles for Bitcoin.com News about today’s emerging disruptive protocols.

Photo credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer, or a solicitation of an offer to buy or sell, or a recommendation or endorsement of any product, service, or company. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

More Popular News

In case you missed it

Learn Crypto Trading, Yield Farms, Income strategies and more at CrytoAnswers
https://nov.link/cryptoanswers