Video News US Fed raises interest rates by 25 basis points… Not enough to catch inflation
The Fed has started raising interest rates slightly. After announcing the 25bp rate hike, there were various opinions, pointing out that this alone could not alleviate inflation. Neither the Feds very timid rate hike nor its expected move forward, many experts have emphasized, will certainly not be able to dispel inflation. If tightening does not accelerate in the coming months, it means inflation is likely to last longer. This could ultimately lead to higher inflation in other currencies, including the eurozone, he warned.
Former US Treasury Secretary Larry Summers has also argued that if the Fed does not raise rates further, it will soon lead to stagflation and recession. He also advised that in reality much stronger measures should be taken to stabilize prices. He added that short-term real interest rates should go up to 5%.
However, some are skeptical about the aggressive move the Fed has predicted. While hinting at the Feds seven rate hikes this year, many say they expect only five or six in reality. Its not a recession, but its because economic growth is noticeably slowing down. In fact, the outlook for the US economy is not very good due to the COVID-19 pandemic and the Ukraine crisis. is getting lower Some say the Fed seems too radical.
Goldman Sachs Stagflation Coming… hard to buy
Goldman Sachs is not at risk of stagflation, but rather that stagflation has already arrived. Stagflation refers to high inflation and low growth in which prices continue to rise despite the economic slowdown. Goldman Sachs explains that over the past 300 years, the events that have fueled inflation have been wars and pandemics. But he said that in the last two years, these two incidents occurred at the same time. He added that the energy supply and demand collapsed, and the economy was completely distorted.
In the chaotic flow, there are many investors who think that now is the time to buy at a low point, but rather, he advised that we do not recommend buying at a low price anymore. As the Fed is battling inflation, it is likely to tighten policy, which will put significant downward pressure on the stock market going forward.
He also said that the current US stock market and international oil prices show a very strong negative correlation. Previously, Goldman Sachs predicted that the international oil price would rise to $135 under the assumption that the war would continue. However, the international oil price continued its sluggish trend as it traded at the $99 level in yesterdays market. Although not at previous levels, international oil prices are rising once again in todays market. Currently, WTI is trading at around $103 and Brent at around $107.
JP Morgan Deposited to Citigroup, a Russian payment agent… Russia likely to avoid default
Russia, which is on the brink of bankruptcy due to Western economic sanctions, appears to be able to avoid default, or default, for now. It was announced that some creditors had received interest on government bonds that Russia paid in dollars. Russia said this week it paid $117 million in interest, or about 141.9 billion won, on two dollar-denominated government bonds that matured this week. However, it was not immediately confirmed whether the interest payment was processed properly, and it is said that one creditor was surprised that the interest was paid in dollars unexpectedly.
JP Morgan, a Russian currency trading bank, said that the funds sent by the Russian government to pay interest on government bonds were processed and deposited into Citigroup, a payment agent. The US has banned transactions between its financial institutions and Russias central bank or treasury under sanctions against Russia. However, there are some exceptions that allow Russian bondholders to collect interest. It is known that this exception is only allowed until May 25th.
Cryptocurrency locked in a box… The uptrend is difficult to sustain despite interest rate hikes
After being locked in a box for the past few weeks, cryptocurrencies are taking off once again after the Fed announced rate hikes. However, it is difficult to predict that the upward trend will continue. Experts also added that as the Ukraine crisis continued, cryptocurrencies were like a table tennis game between resistance and support. However, after the results of the FOMC meeting came out, there was a slight upward trend. However, he explained that the assumption that the Fed will raise rates by 25 basis points seven times has already been reflected in the price. So, unless the Fed is more aggressive, such as raising 50bps, it doesnt look like its going to be easy to get out of here,” he added. In general, however, the Fed has rarely been so radical as to raise 50bps.
But new bond king Jeffrey Gundlack said the market was oversold. Therefore, he advised that in the short term you should buy cryptocurrencies rather than gold. Bitcoin is showing the lower end of its trading range at $41,230, and gold is moving at the upper end, above $1,900, he added, so it would be wise to choose bitcoin over gold.
Although various opinions are divided, it is a situation in which skeptics are strong in proportion. Currently, Bitcoin is moving around the $40,000 level and Ethereum is moving around the $2800 level.