US Economy Update: FOMC, CPI, PPI, & Market Volatility

US Economy Update: FOMC, CPI, PPI, & Market Volatility

by | May 8, 2023 | Crypto Blog

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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March CPI Announcement Looms, Bitcoin Hits 30K, and Crypto Volatility Increases

March CPI Announcement Looms, Bitcoin Hits 30K, and Crypto Volatility Increases

by | Apr 11, 2023 | Crypto Blog

 

It feels like yesterday when the February CPI announcement was made in March, but a month has passed, and the announcement of the March CPI index is just a day away. The US consumer price index (CPI) announcement will be on April 12, 2023.

Perhaps because of this, Bitcoin finally touched 30K this morning! However, there was no particularly favorable news, and it seems that the increasing volatility ahead of the CPI announcement led to a concentration of long positions. In addition to the CPI announcement, the FOMC meeting minutes will also be released, so be cautious of volatility around the announcement time.

 

 

The CPI index has been gradually declining since September 2022. This time, the CPI announcement is expected to be 5.2%, and it is curious whether it will exceed or fall short of the estimate. Personally, I think it might come out slightly below at around 5.1%. Does that mean the coin will skyrocket!? That seems like a different issue.

Since March, the unnecessary steep rise of Bitcoin has increased anxiety. It would be nice if it went up slowly or there was a clear reason, but it has reached $30,000 without any apparent reason, and it worries us how far it will fall again after reaching 30,000 dollars.

 

 

The current US central bank interest rate is 5.00% after raising it by 0.25% in March 2023. It seems likely to increase by 0.25~0.5% within 2023, but it would be great if they could freeze the interest rate until the end of the year.

Looking at Bitcoin, it suddenly started to rise and eventually reached 30K as everyone expected and hoped for. We're used to fluctuations up or down the day before the CPI announcement, but it's been a long time since we've seen such a large consecutive rise, making it hard to adapt.

 

 

Fortunately, I was successful in profiting from a short position last week, and it now seems to be my turn for a long position. I opened long positions on altcoins since last Friday. The price moved sideways from the weekend to Monday, but it soared early this morning, bringing profits.

However, my GALLA coin short position for hedging was liquidated. Still, the rest of the coins' long positions rose so much that the profit rate is much higher.

Crypto news of FTX Japan preparing for a reopening has been circulating, and Solana alone recorded over 200% profit. I sold all of my Solana right away in the morning and took profit. Aptos and Phantom Coin also reached a profit rate of over 100% around 3 PM, and I immediately took profit on all of them. Since tomorrow is the CPI announcement, it would be safer to realize profits right away if you've made a profit. It would be unfair to lose it all again after being greedy!

 

 

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Federal Reserve Plans to Raise Interest Rates Once More This Year

Federal Reserve Plans to Raise Interest Rates Once More This Year

by | Mar 30, 2023 | Crypto Blog

Republican Congressman Kevin Hearn has announced that the Federal Reserve will raise interest rates one more time this year. Hearn made the statement after a closed-door meeting with Federal Reserve Chairman Jerome Powell on March 29, 2023. Powell emphasized that Congress will decide whether to raise the federal deposit insurance limit to ensure that America's individuals and businesses feel their money is safe. The US Open Market Committee (FOMC) dot plot released on March 23, 2023, predicted the year-end interest rate to be 5.1%, with 10 out of 18 FOMC members forecasting the rate to be at 5.00-5.25%.

March 2023 FOMC Interest Rate Announcement Schedule.

March 2023 FOMC Interest Rate Announcement Schedule.

by | Mar 20, 2023 | Crypto Blog

Every month, various important indicators are announced, but the most important one is the FOMC schedule and the corresponding announcement of the benchmark interest rate by the United States!

This week, there is the March FOMC schedule.

To explain why this week's US interest rate announcement is important,

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The current benchmark interest rate of the US central bank is 4.75%. In February, the mood was good after a surprise 0.25% increase, but with the high February CPI, they poured cold water on the situation. Therefore, although it was dominant that the March FOMC interest rate announcement would also be a 0.25% baby step, as various economic indicators were announced, predictions that it would be a 0.5% big step increase were rampant.

However, there were critical opinions about whether the aggressive rate announcements by FOMC Federal Reserve members and Powell were appropriate, given the decrease in trust of US banks following the SVB bankruptcy in early March. Some opinions also emerged that the US government would freeze interest rates in March, as they were wary of the situation.
It's either 0% or a 0.5% increase..there's no middle ground.

It's like coins or stocks, they either go up or down! This kind of feeling?

Anyway, this important FOMC schedule will take place over two days from March 21st to 22nd, 2023, according to US standards.
The most important interest rate announcement time is Wednesday, March 22nd, 2023, at 2 pm US time. It's one hour earlier than last month due to daylight saving time.

The US CPI consumer price index chart shows a shape that is going down, opposite to the interest rate hike chart. It hit a low of 6% in March 2023.

It seems that this gradual decrease is giving power to the opinions of Powell and his colleagues, but in this difficult time after the pandemic and with the aftermath of the Ukraine-Russia war, a high interest rate seems to have more power to worsen the economy rather than reduce inflation, in my personal opinion.

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