Bitcoin and all top-20s are in the red ahead of the Fed's imminent rate hike

Bitcoin and all top-20s are in the red ahead of the Fed's imminent rate hike - financial g1c0747125 640The Federal Reserve is expected to announce a 0,75% short-term interest rate hike on Wednesday this week.

Key points

Busy week for economic data, with 170 companies reporting second quarter earnings; the Fed will likely raise interest rates to cool inflation; and we should know if the US is leaning towards a recession when productivity data is released on Thursday.

Investors appear to be abandoning the risky investments like cryptocurrencies, as the entire cryptocurrency market is down 4,5% and all top-20 cryptocurrencies have been down in the past 24 hours, according to CoinMarketCap.

As of press time, the valuation of the broader cryptocurrency market is down more than 4,5%, while all the top-20 cryptocurrencies have been in the red in the past 24 hours, according to CoinMarketCap. The largest and most popular cryptocurrency, Bitcoin, is following suit and is also trading down between 4% and 5%, while the US stock market has risen slightly, according to Yahoo!

The Fed's current action may not be enough

Last month, the annual inflation rate hit another 40-year high, marking 13 consecutive months of over 5% inflation. These numbers forced the Fed to announce a 0,75% increase in short-term interest rates in June to try to cool inflation. At the same June meeting, Fed Chairman Jerome Powell hinted at the possibility of another 0,75% hike at the central bank's July meeting, which will take place next Tuesday and Wednesday.

If the Fed raises interest rates by another 0,75%, the price of borrowed money would rise to 2,25% -2,50%, but it is unclear whether this is enough to slow the rise in inflation. , considering that the June number rose to 9,1%. In fact, former central bank chairman Ben Bernanke recently criticized the current Fed leadership, saying he should have reacted last year when inflation started to rise in April 2021. We'll see what happens on Wednesday, but the Fed's current attack plan appears to be too little too late. Unfortunately, the average consumer is paying for this monetary policy mistake - literally - by paying higher prices at gas stations, grocery stores, and just about everywhere.

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