Cryptocurrency
The Fed interest rate cut expectations in the markets have begun to converge with the projections of the US Federal Reserve members. There is a calm atmosphere in the markets before the critical US inflation data to be announced tomorrow.
Investors have started pricing in four, at most five, interest rate cuts this year in derivative markets. This represents a serious retreat from the expectation of at least seven interest rate cuts in December. The projections of Fed members currently point to three interest rate cuts, totaling 75 basis points. Stating that the markets are more properly priced today, Penso Advisors Founder Ari Bergmann commented, “We received the message from the Fed that they want to cut interest rates as insurance because they see inflation decreasing.” The median expectation for the US January annual CPI data to be announced on Tuesday indicates a serious decline from 3.4 percent to 2.9 percent. On the other hand, core inflation is expected to decline slightly from 3.9 percent to 3.7 percent. Running afoul of the Fed has cost bond traders dearly in the recent past.
The new inflation and economic growth outlook that the European Central Bank will announce in March will be crucial in deciding when to start cutting interest rates, according to ECB Governing Council Member Pablo Hernandez de Cos.
Jeff Bezos sold nearly 12 million Amazon shares worth more than $2 billion.
Oil fell after rising last week after Iran’s foreign minister signaled the Israel-Hamas dispute was nearing a diplomatic solution. Trading remained quiet with many Asian markets closed for the Lunar New Year holiday.
International Monetary Fund (IMF) President Kristalina Georgieva stated that although the global economic outlook remained resilient, the Middle Eastern economies remained below growth forecasts due to cuts in oil production and the Israel-Gaza conflict.
Although Bitcoin rose towards the highest level of the year, $49,051, with the support of intense interest in the spot exchange traded fund that started trading, it experienced a slight decline due to profit sales.
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