Inflation, which has been largely underestimated in recent years, is now attracting worldwide attention.
The political system cannot hide it anymore.
Central banks have struggled to contain inflation, mainly because they are the lap dogs of a strong financial system.
This resulted in a series of false and misleading policies, had a negative impact on the bank’s reputation, and caused long-term damage to global markets.
We are just getting started…
Now the RBA wants to throw a
- The Reserve Bank of Australia (RBA) may consider a sharp increase in interest rates after the Fed announced a 0.75% rate hike last Wednesday. This is the largest interest rate hike to (try to) increase US inflation since 2000.
- The Fed called the shot, and central banks started chasing it before things got out of control.
- Earlier in June, the RBA surprised investors by raising interest rates to double what analysts had expected — a 50-basis-point increase. As a result, the bank said it would do everything possible to keep inflationary pressures under control.
- Markets anticipate that future interest rates will be linked to Fed-sized rate hikes, with the RBA raising rates by 75 basis points at its July or August meeting.
- The RBA is not the only central bank that has taken action. Australia is now part of a group of more than 50 central banks that will raise interest rates by more than 50 basis points this year.
- European Central Bank (ECB) President Christine Lagarde confirmed the ECB’s plan to accelerate interest rate hikes in July and September.
- Like the RBA and ECB, many other central banks around the world are also struggling to fight against a higher than expected increase in inflation due to supply chain and energy disruptions caused by the conflict between Russia and Ukraine, as well as due to sanctions. Too. For the epidemic in China.
the economy killer
According to financial analysts, a sharp increase in interest rates to tackle inflation will not help economic growth. We are moving to a level that will result in fewer jobs, lower wages and a general decline in the global economy.
The decision of central banks to raise interest rates after the Fed meeting has an immediate impact on the cryptocurrency market.
Bitcoin and other major cryptocurrencies have all experienced significant price drops. Crypto traders have been on an emotional roller coaster over the past week, due to market downturns.
The ongoing bad news has tested nerves again and again. The accumulated pressure has led to a massive selloff of the highly speculative cryptocurrency.
Global financial markets are betting that the US Federal Reserve will raise interest rates more aggressively in the future than expected. This fear has caused a sell-off in both the cryptocurrency and stock markets.
This is not the first time that individual investors have been tested, but it is the first time in many years that the market has experienced a significant downturn as it becomes clear that the liberal support policies of central banks are limited.
The policy change announced by Fed Chairman Jerome Powell last week jolted the risk-on-asset market. Not only individual investors, but also professionals, have voted with their feet, selling risky assets at a record pace in months.
Previously, investors viewed cryptocurrencies as a solution to inflation, low interest rates, or recessions.
Many expected the cryptocurrency to continue to outperform other markets, despite the Fed’s move.
However, some investors have begun to question the functionality of the cryptocurrency. The recent reaction of the crypto market to the Fed’s announcements has added to the speculation.
In addition, many of the world’s leading cryptocurrency exchanges have laid off staff as a result of the recent sharp drop in the value of the company’s stock and the cryptocurrency market.
The list includes several well-known companies, including Coinbase, BlockFi, Crypto.com, and Gemini.
We are on the pier, looking into the abyss. Few assets in financial history will not survive this era. The author is betting that crypto is the one that will do.
Post Global Central Banks Participate In Inflation Battle: How It Affects Crypto? Appeared first on Blockonomi.
