The economic developments in the United States remain of great importance worldwide. We are currently eagerly awaiting the latest interest rate decision from the US Federal Reserve and the release of inflation data for February.
However, recent events in the US banking sector have lowered expectations for rate hikes and may overshadow the release of inflation data. In addition, the turmoil in the banking sector appears to be having a positive effect on cryptocurrency prices. This article discusses the recent economic developments in the United States and the possible consequences for investors worldwide.
Doubts about the Fed’s new interest rate decision
The US Federal Reserve will soon announce its latest interest rate decision, but fewer and fewer people are expecting sharp rate hikes due to recent events in the US banking sector. Due to the current chaos in the banking sector, some analysts will see the release of inflation data for February overshadowed.
Meanwhile, cryptocurrency prices have shown an increase due to the turmoil in the US regional banking sector and changes in interest rate hike expectations. The probability of no rate hike next week has risen to 32%. The recent fall of two US banks has made more people consider investing in decentralized digital assets, such as bitcoin (BTC) and ethereum (ETH).
Are interest rates going down?
Analysts at Nomura suggest that the Fed could cut rates and end quantitative tightening because of looming financial stability risks. The prices of bitcoin and ethereum have risen and suddenly everything has changed.
Listed banks have had a mixed day. The inflation figures for February were also announced today. There were no surprises there, as a result of which bitcoin rose sharply in value.
In short, the US economy and banking sector remain sensitive to the impact of interest rate decisions and inflation data. The emergence of crypto as an alternative investment option in times of uncertainty seems set to continue, while the question remains whether the Fed will be able to keep the economy stable.