Fever in the stock market and cryptocurrencies: the FED will speak!

Central banks, stocks and cryptocurrencies – Self Bitcoin (BTC) and cryptocurrencies have their cycles of ups and downs, cryptocurrencies obviously remain linked to the macroeconomic context. And the latter is more than feverishwith the desperate struggle of central banks against the onset of hyperinflationwith which they created huge money prints. The next decisions of the Federal Reserve (Fed) are of particular concern to financial market participants.

Federal Reserve: Will it raise its key rate or not?

To print offer of money for compensate “whatever the cost” the losses (sometimes total) due extreme restrictions linked to the Covid emergency. Here is an idea that comes out very ugly long term. Indeed, these excesses of fiat currencies, combined with the war in Ukraine, are causing a inflation prices more than worrying.

With record inflation of 9.1% in June over a year in the United States, we understand that the Federal Reserve already have raised its key rates by 0.75 points June 15, 2022. This Wednesday July 27there is a good chance it is rebel.

Indeed, as reported in particular by the Financial Times (FT), investors have come to expect from the Fed rise again its key rate, probably 0.75 points again. These rates would then be brought within a range of from 2.25% to 2.5%.

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Equity markets are gray, cryptocurrencies are not leading the way

These rate hikes are what investors are striving for turn your back so-called goods “risky” (switch to market sentiment to risk), as the Actions of companies and the cryptocurrencies.

However, pending the Federal Reserve decision on Wednesday, stocks, especially those of companies Europeanbegan to show signs of volatility. As FT reports, Eurozone corporate stocks have first lowered when the market opens, before resuming a bit, and stagnating towards opening prices.

If the Fed raises rates on Wednesday, fears of hyperinflation will move away. But if these rate hikes continue too long / forcefully, they could lead to a “deeper and longer slowdown” economics, according to a macroeconomic specialist quoted by FT. Indeed, investments in businesses – is in the cryptographic projects – it would be much more coldslowing down growth and innovation.

The United States Federal Reserve – like many central banks, including the ECB in Europe – meeting a to carry out the act of balance between two sticks of dynamite. On the one hand, keep the economy in perfusion due to the latest Covid restrictions (disproportionately increasing its fiat money supply), on the other hand, prevent inflation as its key rates rise. All this without the risk of causing a stock market disaster which would make the 2008 crisis seem like child’s play. In the meantime, we will have to hold our breath until the Fed does its duty.

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