Global Shares and Crypto Fall – U.S. Inflation Impact

Global shares fell on Friday. This is after data showed that consumer inflation in the U.S. reached a new 40-year high in January, reinforcing fears that the Federal Reserve may be behind the curve; Coping with rising price pressures and forcing investors to give up more risky assets. According to data released on Thursday, the consumer price index used to measure the basket of everyday goods and services rose 7.5% year-on-year to January. That was more than 7.3% of what economists expected. In addition, the highest since 1982; Which broke the key indexes.

Global stocks fell sharply on Friday. The MSCI Global Index dropped 0.39%. U.S. stocks decreased. S&P 500 futures were down 0.47%. NASDAQ 100 futures fell 0.52%. This indicates a weak start of trade later.

The Fed maintains a target of 2% for core consumer inflation; This excludes food and energy prices. A higher rate may force the central bank to raise interest rates; To protect the economy from spiraling price pressures. Markets show that investors expect the Fed to raise rates with each policy meeting this year and possibly beyond.

According to the head of market intelligence at Caxton, the data did not disappoint inflation chores. Showed that prices in January rose by a maximum of 7.5% each year for the new four decades; Excluding volatile food and energy components, prices have increased by 6% year-on-year. Both figures are fine. The above is, in fact, three times the Fed price target.

One of the Fed’s tougher policymakers added that it preferred exponential growth in interest rates. He said it is desirable to have 100 base points in the bag by July.

U.S. Inflation

The interest rate on 10-year treasury bonds fell to 1.998%, by three basis points; Which reached a maximum of 2.056% the previous day. This was the first time the benchmark rate had exceeded 2%; After the summer of 2019. European markets are in line with Asia, where the Asia-Pacific MSCI index outside Japan fell 1.1%. The Stoxx 600 was down 1.04%. According to Friday data, the U.K. economy grew by 7.5% in 2021. This is the brisk advance rate since 1941. GDP fell by 0.2% in December compared to the previous month, compared to expectations of a 0.6% decline.

The Omicron variant affected output in December; As expected, they dominated consumer activity, undoubtedly affecting the January figures. Against the backdrop of the cost of living crisis, he hardly portrays it as a rosy prospect – in the U.K. this year. Economic growth will inevitably slow to its suboptimal level of post-Brexit. Bitcoin and Etherium in the cryptocurrency market fell by 1.74% and 3.10% on Friday. According to reports, Bitcoin is still almost 15%; Etherium gained nearly 10% during this time. More volatile altcoins suffered heavier losses. Solana fell 6.25%. While Polkadot’s point fell, Dot dropped by 7.5%.