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For risky markets, this Fed meeting on July 26-27 should be the highlight of the week. For ad Rate increase of 75 basis pointsThe Fed has rekindled the flames in the cryptocurrency market. But also on the market. In addition to the figures, his philosophy first of all convinces.
Federal Reserve Announces New 75bp Hike!
Meeting between fears and hopes FOMC (Federal Open Market Committee) should have formed the markets this week. And it hasn’t failed. With the announcement of a rate hike of 75 basis points, the level expected by the markets, the institution has unleashed a tsunami of purchases on the stock exchange and in the digital asset market.
Because numbers aside, the US central bank’s attitude is particularly encouraging. In fact, Jerome Powell, the president of the agency, made it clear. Lack of long-term visibility the US economy was left with no choice but to establish a policy of “meeting by meeting”. According to Peter Tooze, chairman of Chase Investment Counsel Corporation, markets appreciate the Fed’s willingness to let the market determine its monetary policy.
Therefore, the Fed rose between June and July. Key interest rates at 150 basis points, for the first time since the 1980s. I must say that inflation is dangerously approaching 10%. The latest figures released for June showed inflation at 9.1% over a period of 12 consecutive months. If the Fed is fighting a rise in the general price level, it also needs to ensure that the US economy does not slide into recession. The room for maneuver now seems rather narrow.
The cryptocurrency market is booming!
The cryptocurrency market reacted sharply to the Fed’s statements. Below $ 21,500 before the end of the monetary policy meeting, bitcoin rose to $ 23,000. As shown in the chart below, the price of the parent cryptocurrency continues to show last 24 hours :
At the moment Bitcoin flirts with a $ 23,000 threshold, above the 200-week moving average ($ 22,800). More than a Fed policy statement, the market is primarily looking for a weekly close for BTC above this moving average. At this price, the market can reverse the trend for longer.
At his side Ethereum flirted with $ 1700, and has reached worst hit levels for over a month. All altcoins have also followed suit. Polkadot has grown 12% in the past 24 hours. The Solana, Cardano and Binance Coin projects show growth of 5 to 8%. Of the top 100 cryptocurrency markets, none have reported losses in the past 24 hours. Overall, the market grew by 7.20%
American stock exchanges are celebrating!
Statements from the US Federal Reserve also had an impact on the stock market. Coupled with a 75 basis point rate hike, the Fed chairman appears to have reassured investors. In yesterday’s session the Dow Jones index recovered 1.37 points. closes at 32,200 points. The S&P 500 was up 2.62% during the session, topping 4,000 points. Finally, the Nasdaq Composite was up 469 points to close at 4.06%.
This surge translates into the Nasdaq’s highest daily gain since April 2020. The S&P 500, for its part, is reaching an unprecedented level. from 8.6. While the Fed’s announcement had a significant impact on the markets, US equity markets also received support following the release of the results from Microsoft and Alphabet.
In other parts of the world, this announcement does not appear to have had a direct impact. At the start of the daily session, the CAC 40 showed a preliminary increase of 0.16%. Same observation for the FTSE 100, which is down 0.24% at the time of writing.
Cryptocurrencies are a risky investment.