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Jerome Powell's recent statements following a modest 25 basis point interest rate hike have unsettled investors, as the Federal Reserve anticipates only two rate cuts next year due to persistent inflation concerns. The DAX is now in correction mode, with critical support at 20,000 points under threat, potentially leading to further declines towards the 19,703/19,681 range.
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Markets are bracing for a prolonged period of high interest rates following the Federal Reserve's recent policy decision, which raised forecasts for inflation and GDP growth while signaling caution on future cuts. The dollar surged, impacting emerging markets and tech stocks, with Micron Technology shares plummeting after disappointing earnings. Meanwhile, global central banks, including the Bank of England and Brazil's central bank, are navigating their own monetary challenges amid rising inflation and economic pressures.
The Federal Reserve's 0.25% interest rate cut triggered a swift liquidation of over $239 million in the crypto market, with Bitcoin briefly dipping below $100,000. Major cryptocurrencies, including Ethereum and XRP, also experienced significant declines, reflecting investor concerns about future rate cuts and inflation control. The overall market cap for meme coins fell nearly 8%, highlighting the widespread impact of the Fed's cautious stance.
The S&P 500 experienced its largest decline on record following a Federal Reserve decision on Wednesday. This significant drop highlights the market's reaction to monetary policy changes and investor sentiment in the wake of the announcement.
The crypto market is facing significant turmoil, with a 3.4% drop in total market value. Bitcoin briefly fell below $100K, while Floki plummeted 13.95% in a day, reflecting a broader sentiment shift. Ethereum saw a 5.08% decline but experienced a 40% surge in trading volume, indicating underlying investor interest amidst the chaos.
Bitcoin (BTC) is experiencing selling pressure ahead of the Federal Reserve's anticipated 0.25% interest rate cut, with current trading around $102,051.94. Despite this, strong buying activity suggests resilience, and traders are eyeing a CME futures gap near $102K as a potential buy-the-dip opportunity. A favorable FOMC outcome could reignite bullish momentum, shifting market sentiment towards a rally.
The Federal Reserve's recent hawkish stance, signaling a slower pace of interest rate cuts, has led to a surge in the US dollar, causing significant pressure on major currency pairs like AUD/USD, EUR/USD, GBP/USD, and USD/JPY. Traders are adjusting positions as the dollar strengthens, with AUD/USD nearing 2 ¼ year lows and USD/JPY sensitive to the divergence in monetary policy between the Fed and the Bank of Japan. Market expectations now reflect a reduced outlook for rate cuts in 2025, influenced by strong US inflation and economic indicators.
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Raiffeisen Bank International faces a potential financial setback in Russia, with a court ruling on a €1.9 billion lawsuit from Rasperia scheduled for December 25. The case, linked to sanctions affecting Strabag's shares, could significantly impact RBI's balance sheet, although the bank remains well-capitalized and plans to contest any negative judgment. Meanwhile, RBI is under pressure from the ECB and US authorities to reduce its Russian operations, with nearly €6 billion in equity currently inaccessible due to sanctions.
Bitcoin's price briefly dipped below $100,000 following the Federal Reserve's cautious outlook on interest rate cuts, dropping to $98,760 before recovering. Despite this volatility, the cryptocurrency remains up about 50% since the US elections, buoyed by optimism around regulatory changes. Analysts suggest that Bitcoin must surpass $105,400 to shift the current bearish sentiment, while concerns about persistent inflation continue to loom.
Donald Trump’s World Liberty Financial (WLFI) has made significant moves in the crypto market, recently swapping cbBTC for wBTC, signaling a shift towards decentralization away from Coinbase's control. This $10.4 million exchange reflects a strategic pivot to enhance liquidity and align with the DeFi landscape, as WLFI aims to bolster the U.S. dollar's position in cryptocurrencies. With ongoing investments in various digital assets and partnerships, WLFI is poised to attract more users and investors while promoting transparency and security in its operations.
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