Global markets, Bitcoin defy the expectations after the Hawkish Tafer Plan of the Fed's Hawkish announcement
Global markets, Bitcoin defy the expectations after the Hawkish Tafer Plan of the Fed's Hawkish announcement
The global markets have opposed the predictions because the US Federal Reserve and several central banks prepare a slowdown of monetary political loosening measures worldwide. On Wednesday, the Offenmarkt Committee (FOMC) announced the US Federal Reserve to reduce quantitative loosening (large monthly securities purchases) and end the program by March 2022. In addition, the FOMC members decided to leave interest rates from zero, but with at least three interest rate increases next year.
Federal Reserve sketches plan to reduce the purchase of assets and interest rate increases for 2022
Since the outbreak of Covid-19 in the United States, the US Federal Reserve has initiated monetary political relaxation like no other in history. The move has to a Inflation thrust and analysts and analysts worldwide criticized the decisions of the fed Time. The FOMC completed a two-day session on Wednesday and the central bank that it is planning to plan his bond purchase until January 30 to January Reduce billions of US dollars a month. This month, the Fed will mobilize $ 90 billion in purchases through quantitative loosening (QE), in contrast to $ 120 billion in the previous month.
In addition to reducing the QE, the FOMC members also have that the central bank next year three interest rate increases next year Plant. It expects three interest rate increases in 2022, two further interest rate increases in 2023 and two further interest rate increases in 2024. However, the Fed did not attribute the increasing inflation in the United States to their quantitative loosening, but instead found that inflation was involved through problems. The supply and demand was caused.
"Offer and demand weight weights in connection with pandemic and the reopening of the economy have continued to contribute to an increased level of inflation," said the FOMC on Wednesday. In addition, the FOMC declarations said that Covid-19 and new coronavirus variants have strongly influenced the US economy.
"Buy rumors, sell facts": Global markets and Bitcoin rise after the FOMC session
Despite the tap declarations and the announcement that there will probably be three interest rate increases next year, the Fed's comments showed a market reaction that was opposite the expectations before the tap announcement. Nasdaq, Nyse and the Dow Jones recorded all profits after completing the FOMC session. In an interview with Bitcoin.com News, Alex Kuptsikevich, the leading market analyst from FXPRO, said that the FED "held the most restrictive market expectations" on Wednesday.
"The FOMC announced that the pace of tapering would double," said Kuptsikevich. "The updated forecasts of the committee indicate three key increases in 2022, although he had not expected any six months ago. We have also heard that the balancing of the FED goals allows it to start with an increase in interest due to the higher inflation before full employment is achieved."
"The Fed chairman also" increases "the ratings of financial investments," continued the market analyst. "This is a clear signal for the willingness to harm the markets as he did in 2018. During the press conference, Powell found that FOMC had no consensus about the time of the balance sheet cut of the Fed. In the previous economy, this was not a real topic for a long time - the dollar index recovered within the first few minutes and reached the FOMC High -up stalls from July 2020, but then turned down.
Kuptsikevich added:
You have the feeling that the markets have prepared for risk to risk because it expects softness from the Fed and, despite the rhetoric of the Fed. Some commentators believe that we saw a classic reaction such as "buying rumors, sell facts". However, the increase in "growth" shares speaks more for the market mood of happily ending a strong year. At the same time, a wave of profit treatment seems to have started in the last six months, although the attitude of the FED is significantly more restrictive compared to other central banks from the DXY basket.
also Bitcoin (btc) on Wednesday opposed the expectations when the price was announced after the restrictive plans of the FOMC climbed a level. Shortly before the end of the meeting btc exchanged the hands for $ 46.590 per unit and after the fomc session came to a conclusion, btc The prices jumped on Wednesday afternoon (est) to a high of 49.420 USD.
Bank of England increases key interest rate, European central bank keeps interest low, US unemployment claims are still above the level before pandemy
In addition to the FOMC session, the Bank of England (BOE) increased its key interest rate from 0.1% to 0.25%. No other central banks have done that, and the European Central Bank, like the Federal Reserve, held its key interest rate for the time being.
The European Central Bank said that it would not increase the loan interest until inflation has calmed down. In addition, the weekly US unanswered applications from the Ministry of Labor indicates an increase last week. The report of the Ministry of Labor shows that the unemployment claims are still well above the level before pandemic.
What do you think of the Tapper process of the Federal Reserve and the discussions about a three-time increase in the key interest in 2022? What do you think that the Bank of England will raise its key interest rate for the first time since the beginning of the Covid 19 pandemic? Let us know your opinion on this topic in the comments below.
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