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- What does an increase in interest rates bring to the economy and the market?
- How does a high key rate affect the crypto market?
Based on Walter Bloomberg’s Twitter account, JPMorgan Chase CEO Jamie Dimon has stated that four key rate hikes of 0.25% will change the shape of the US economy. Prior to that, the Fed’s hint of a rate hike in March crashed both stock markets and digital assets.
What does an increase in interest rates bring to the economy and the market?
A key exchange rate is one of the main tools to strengthen a country’s national monetary and monetary policy, creating more favorable conditions for foreign investors to boost the economy by buying bonds. government bonds and citizens of a country, who are more likely to deposit money in banks than in the stock market.
JPMORGAN’S DIMON: FOUR RATE 0.25% EVERYTHING WILL HAVE NO ENERGY EFFECT ON THE ECONOMY
– * Walter Bloomberg (@DeItaone) January 11, 2022
In the past, the US has implemented quantitative easing, a form of monetary policy in which the central bank encourages lending and investment by buying long-term securities on the open market.
Financial experts note that quantitative easing is one of the main drivers of the nearly 13-year bull cycle in the US stock market.
How does a high key rate affect the crypto market?
In addition to incentivizing investment in national currencies, a high key rate creates conditions in which traders are more likely to invest in risky assets such as commodities and precious metals than in risky assets. risk like cryptocurrencies.
Previously, U.Today mentioned one of the main reasons behind the drop in the Bitcoin and crypto markets which is also reflected in the stock market. Both crashes occurred after the Fed authorized a key rate hike in March of this year.
At the same time, strategists Jamie Dimon, BlackRock and JPMorgan have stated that the market is currently oversold and we could see a near-term bounce.
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