Following last week’s FOMC meeting, the United States announced a 0.25% increase in its benchmark interest rate. This week, the US Consumer Price Index (CPI) and the US Producer Price Index (PPI) will be released.
CPI US Consumer Price Index Release Time: Wednesday, May 10, 2023, at 08:30 am (UST)
PPI US Producer Price Index Release Time: Thursday, May 11, 2023, at 08:30 am (UST)
Major index announcements are scheduled for Wednesday and Thursday mornings at 8:30 am this week.
[US CPI Consumer Price Index Year-over-Year Chart Graphic Image]
The forecast for April’s CPI year-over-year, to be announced on Wednesday, May 10, is predicted to be 5%, the same rate of increase as last April. The US economy is in disarray these days, with inflation not moving at all and news of a potential default due to debt from the world’s strongest economic power. Even Warren Buffett, who leads Berkshire Hathaway, has added to the conversation, saying the future of the US economy is bleak. Of course, he did not forget to praise Apple, Berkshire Hathaway’s largest holding.
High interest rates and ongoing rate hikes have made even US banks unsafe. Most people expect the 0.25% rate hike during this FOMC meeting to be the last, but opinions on rate cuts vary widely. Predictions like, “It will be cut in September,” “It will be cut in December,” and “It won’t be cut until March 2024,” are pouring out.
Instead of relying on predictions close to other people’s prophecies, investors should keep an eye on major indices like this week’s CPI and PPI and continually check and respond to the changing economic situation.
[US Central Bank Benchmark Interest Rate Chart Graphic Image]
The US central bank’s benchmark interest rate rose to 5.25% last week with a third consecutive 0.25% increase. Experts who predicted no further rate increases from 4% in spring 2022 have seemingly disappeared. The current situation feels like a bomb ready to explode, making trading extremely frightening.
Additionally, the ongoing war between Ukraine and Russia does not seem to be improving, making it nerve-wracking to buy or sell coins even once. Let’s hope peace returns soon!
[May 8, 2023, Bitcoin 15-minute Chart]
The Bitcoin 15-minute chart since April 26 shows a merciless trend. While futures scalpers might be saying “Wow, it’s trading sideways in a box range!” and making profits, it’s a difficult chart for regular traders. With this week’s CPI and PPI major index releases, it’s already scary to think about how much volatility there will be. Let’s hope the price doesn’t drop further and touch 27k again.
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