Fed’s Minutes Report ‘Bludgeons’ Global Markets – Stocks, Crypto, Precious Metals Slip in Value
Recently published notes of the Fed meeting last month. These notes indicate that the U.S. central banking believes the economy is strong enough to reduce major asset purchases and raise the benchmark interest rate. Vishnu Varathan , Mizuho Bank’s financial author, stated in a report the Fed minutes update ‘bludgeoned markets’ after being published. Randall W. Forsyth, Barron’s financial writer, wrote that investors are’surprised’.
Jerome Powell, Fed chair, did not give details about when the interest rate rise would begin. Powell stated that it was best to take a methodical, careful approach to QE. Powell said that tapering should be approached with caution because markets can be sensitive. After the Fed minutes were published on January 5, stock markets became sensitive and the cryptocurrency economy lost billions of value. Silver lost 3% and gold fell 1% in the 24 hours following publication of the Fed minutes.
Following Wall Street’s plunge, Asian stocks also fell during the overnight (EST), trading sessions. The Dow Jones index fell 100 points, while Wall Street’s most popular indexes gained some ground on Thursday. However, the Nasdaq was up a few percentage points and the NYSE were slightly higher in the morning. The digital currency markets are all down 8.3%, as the crypto economy today is worth $2.17 trillion.
According to the Fed minutes, the inflation rate in the U.S. had risen a lot but the economy’s strength was still considered healthy. Fed participants stated that they want to “begin to reduce [the Federal Reserve’s] balance sheet relatively quickly after increasing the federal funds rate.” January 25-26 is the next scheduled meeting of the U.S. central banks.