The ripple effect of the bearish sentiment in the US stock market has also contributed to the encompassing slump in the digital currency ecosystem.
Treasury yields in the United States went on a bounce on Monday as investors started assessing the positivity around the latest interest rate hike on the broader stock market. As reported by Coinspeaker, the Federal Open Market Committee (FOMC) of the Federal Reserve raised interest rates by 50 basis points to its highest level in 15 years.
Besides the heightened interest rate, the 50 basis points increment is a slowdown in the Fed’s targeted fight against inflation in America. Prior to this, the Feds raised the interest rates by 75 basis points on at least 4 occasions as the inflation in the country took a new momentum in the year.
The Treasury yields went on a bounce today as investors places the Fed’s approach into perspective. While the yield on the 10-year Treasury Note is up by 3 basis points at 3.5167%, that on the 30-year Treasury Bond added around 4 basis points to 3.5750%.
The growth is assumed to be setting the pace for the stock market this week, as the top market indices look to recoup some losses printed earlier. The S&P 500 Index (INDEXSP: .INX) is down 1.11% to 3,852.36, and the Nasdaq Composite (INDEXNASDAQ: .IXIC) shed off more than 105 points at a rate of 0.97% to 10,705.41, and Dow Jones Industrial Average (INDEXDJX: .DJI) closed Friday’s session at 32,920.46, down 0.85%.
In the ongoing Coinspeaker Advent Calendar Series, the forecast for each of the major indices for the coming year has been published. This forecast shows that despite the massive losses experienced thus far this year, investors may still find a glimmer of hope in betting on the funds tracking this index, especially in the long term.
Hawkish Impacts on Stock Market Growth
Investors have no clue how far the Fed will go into normalizing the major concern in the economy – inflation. According to the Federal Reserve Chairman Jerome Powell, the Central Bank’s efforts to curb inflation are far from over. While the latest inflation reading for November came in at 7.1%, Powell noted that policymakers will “have to stay at it.”
The push to go all out to fight inflation is poised to continually set investors on the edge and many will shun risk assets for the foreseeable future. These dampened sentiments were reflected in the 2023 forecast for some of the major stocks trading on either the Nasdaq Global Select Market or the New York Stock Exchange.
The ripple effect of the bearish sentiment in the US stock market has also contributed to the encompassing slump in the digital currency ecosystem. With Bitcoin (BTC) dropping by 1.34% over the past week to $16,760.78, and Ethereum’s 5.5% drop to $1,185.92, the impacts of the Fed’s hawkish approach to the market will notably be an encompassing one.
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