“It’s officially Fed Week, the week we’ve all been waiting for,” declared macroeconomic magazine The Kobeissi Letter on March 17.
The Federal Reserve will make its highly anticipated announcement on March 20 that will set the tone for the U.S. economic outlook going forward.
Important events this week:
1. Construction Start Dates – Tuesday
2. Fed interest rate decision – Wednesday
3rd Fed Press Conference – Wednesday
4. Philly Fed Manufacturing Index – Thursday
5. Existing Home Sales Data – Thursday
6. Fed Chairman Powell speaks – Friday
It's officially Fed…
– The Kobeissi Letter (@KobeissiLetter) March 17, 2024
Interest rate cut unlikely
According to the Chicago Mercantile Exchange, there is up to a 99% chance the Fed will leave interest rates unchanged.
For the first time this year, markets now see just three rate cuts in 2024, Kobeissi reported, adding that the chance of a rate cut this week is less than 2% and the chance of a rate cut in May is about 7%.
Just three months ago, markets were expecting up to seven rate cuts in 2024, she added, explaining:
“As inflation data begins to rise again, three rate cuts are starting to look optimistic.”
Interest rates in the US are currently at 5.5%, which has been the case since July 2023, as the central bank struggles with inflation.
In addition to the US, Australia, the UK, Japan and other countries will also announce interest rate decisions this week, so market volatility is to be expected.
Bitcoin in the danger zone?
Bitcoin and crypto markets have been buoyed by institutional interest following the launch of spot ETFs in the US. However, as daily ETF inflows begin to decline, this fervor could wane as the halving approaches.
On March 17, crypto trader and analyst “Rekt Capital” wrote that Bitcoin would officially enter the “danger zone” this week, where historic pre-halving retracements had begun.
Historically, BTC has performed these retracements two to four weeks before the halving. In 2020, this retracement was -20% and in 2016, it was -40%, he noted.
BTC is already down 7.7% from its March 14 all-time high of $73,738 and is trading at $68,600 at the time of writing.
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