Market review: Inflation continues to increase, stocks and cryptos slide
Market review: Inflation continues to increase, stocks and cryptos slide
- New inflation reports show that inflation with the highest increase rate has been increasing in 40 years
- The increase seems to have brought fear back into the market, as investors begin to expect a more aggressive tightening of monetary policy from the Fed
! Function () {"Use strict"; Window.Addeventlistener ("Message", (function (e) {if (void 0! == e.data ["datawrapper-Height"]) {var t = document.queryselectorall ("iframe"); for (var a in E.Data ["Datawrapper-Height"]) for (var r = 0; r In January of the consumer price index increased by a further 0.6 % and increased the value in the annual comparison to 7.5 %. The increase rate of inflation is now as high as it has not been since 1982. Fear seemed to be gone last week, but the new inflation report brought it back. A higher inflation will probably lead to more aggressive interest rate increases by the Fed, a movement that is historically correlated with falling markets and even recessions. As shown in the following graphic, slow climbs of the key interest rate, which directly controls the liquidity in the economy, correlated with strong declines of the S&P 500 in 2000, 2007 and last 2019. In contrast, the reduction in the key interest rate was correlated with intensive household markets. The markets fell due to the news, and the S&P 500 fell by up to 2.18 %that day. On this day, the Nasdaq fell by up to 2.72 % and the Dow by up to 1.11 %, probably due to the fears of investors before an aggressive attitude of the Fed to combat inflation. Cryptos Volatile reactions to the inflation report, with Bitcoin increasing by 2 % and then lost 2.53 % at noon. Bitcoin then turned again and rose by over 3 %. During the day he started falling and fell by half a percent when the stock market ended its day. Ethereum moved similarly all day, started by 1.11 %, then fell by almost 4.6 % and then rose again by over half a percent. At the end of the stock market day, Ether had fallen by 3.9 %. crypto investors seemed unsafe how they should react to the number of inflation. Some may have seen inflation as a good sign of crypto, since the advertised application of Bitcoin serves as inflation protection. Many large Bitcoin influencers tried to enforce Bitcoin as a saving grace of investors against inflation on social media. inflation just reached 7.5 %. The highest since 1982. Bitcoin was built in response to undisciplined money and fiscal policy. -pomp Since Bitcoin ends the day with red numbers, most investors seem to be concerned that higher inflation only means a more aggressive approach of the Fed to combat the falling purchasing power of the dollar. Story: Sources: UBS Asset Management checks crypto hedge fund manager story: Analysts assess the likelihood of interest rate increases in March, since the CPI is again disappointed Story: Decentraland, introduction of FTX ETPS in Switzerland story: YouTube strengthens the NFT integration, says Exec The increase in inflation seems to have again unsettled investors and brings more fear and uncertainty back to the market. The volatility will probably last as long as the uncertainty, which may only be alleviated by an announcement of the FED on interest rates and securities purchases. . . The Post Market Recap: Inflation Keeps Rising, Stocks and Cryptos Slide is not a financial advice. 
(@apompliano) 10. February 2022 Top stories
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