Stocks, precious metals and cryptocurrencies have been buzzing for the last three weeks of 2023, and all eyes are now on the next Federal Open Market Committee (FOMC) meeting, which is 11 days away. On Friday, Federal Reserve Governor Christopher Waller said he would support a quarter-point hike in benchmark interest rates at the next FOMC meeting. Analysts believe current market moves will depend on the outcome of the next Fed meeting.
Markets are still tense ahead of the Fed meeting despite the rally in stocks, cryptocurrencies and precious metals in 2023
As of Saturday, January 21, 2023 at 2:45 p.m. Eastern time, the cryptocurrency’s global market cap increased by 5.87% from the previous day to stand at approximately $1.06 trillion. Leading crypto-asset Bitcoin (BTC) was up 11.63% against the US dollar over the past seven days. The second-leading digital currency by market valuation, Ethereum (ETH), was up 8.33% against the greenback for the week. The appreciation of these two crypto assets has also increased the US dollar value of the thousands of digital currencies below BTC and ETH.
BTC/USD on Jan 21, 2023 at 4:24pm ET. As of 4:24 p.m. Saturday, the global crypto market cap had fallen to $1.05 trillion, with BTC trading at $23,133 per coin, according to market data.
The day before, on Friday, January 20th, the stock markets closed the day in the green. The four main benchmark stocks (S&P 500, Dow Jones, Nasdaq and Russell 2000) ended the day between 1% and 2.66% higher against the US dollar. The Nasdaq Composite was the highest, up 2.66%, the S&P 500 was up 1.89%, the Russell 2000 Index (RUT) was up 1.69% and the Dow was up 1% on Friday. US stocks have posted their second straight week of gains so far this year. The small-cap stock market index RUT is up 7.1% this year, with small-cap stocks leading the stock race in 2023.
Closing percentage increases of the four major benchmark indices on Friday 20th January 2023.
Precious metals also performed well, with gold trading at $1,927.30 per unit and silver at $24.01 per ounce. Like cryptocurrencies and stocks, precious metals have rallied in 2023, erasing December 2022 losses. Gold enthusiast Peter Schiff believes the price of the yellow precious metal will rise this year. “Gold is now trading above $1,934, its highest price since April 2022,” Schiff said tweeted on January 19th. “However, gold stocks haven’t even cleared last week’s high. In fact, gold stocks need to climb 30% from here just to get back to where they were trading in April 2022. This sale may not last long,” he added.
New York spot prices for gold, silver, platinum, palladium and rhodium as of Friday, January 20, 2023.
Speaking to Kitco News, Edward Moya, senior market analyst at OANDA, explained that gold prices will remain indifferent until the February 2023 Federal Reserve meeting. “It’s getting restless,” said Moya. “I am neutral on gold until the Fed meeting on February 1st. The major resistance is at $2,000. But I would be surprised if we move above $1,950. We will likely consolidate here by the Fed meeting,” the market analyst added. Market analysts and macro experts have no idea what the Fed will do at the FOMC meeting. Some believe an aggressive tightening plan will continue, while others expect the Fed to ease and pivot with a “soft landing.”
The Biden administration and White House Economist Heather Boushey told Portal current leaders do not expect a recession. “Steps have been taken and it looks like we’re in a very good position to have that soft landing that everyone is talking about,” Boushey said. On Friday, Federal Reserve Governor Christopher Waller told reporters at a Council on Foreign Relations conference in New York that he favored a smaller rate hike than the previous seven. So far in 2022, the Fed has made seven rate hikes, two of which were half-point hikes and five of which were three-quarter-point hikes. Waller can see a quarter-point rise at the next FOMC meeting next month.
“I currently prefer a 25 basis point hike at the next FOMC meeting later this month,” Waller told press. “In addition, we still have a significant way to go to reach our 2 percent inflation target and I expect to support further tightening of monetary policy,” the Fed Governor added.
It is highly likely that all three major markets (precious metals, cryptocurrencies and stocks) will react in one way or another after the next Fed decision. Many believe that the decision of the next FOMC meeting will depend entirely on inflation indicators. US President Joe Biden tweeted about the US economy over the weekend as he believes the country is on the road to recovery. “Annual inflation is down six straight months and gas is down $1.70 from its peak,” Biden said tweeted on Saturday morning at 10:25 a.m. Eastern Time. “We are successfully moving from economic recovery to stable growth,” Biden added.
Tags in this story benchmark rate hike, bitcoin, btc, christopher waller, council on foreign relations, cryptocurrencies, cryptocurrency market cap, dow jones, economic recovery, economy, economy, edward moya, stocks, stock markets, eth, ethereum, federal open market Committee (FOMC), Federal Reserve, World Economy, Gold, Gold Price, Heather Boushey, Inflation, Joe Biden, Kitco News, Market Actions, Nasdaq, Next Fed Meeting, OANDA, Peter Schiff, Precious Metals, Russell 2000, S&P 500, Silver, Silver Price, Small Cap Stocks, Stable Growth, Stock Rally, US, US Dollar, US Economy
What do you think the outcome of the next FOMC meeting will be and how do you think it will affect the current market developments for equities, precious metals and cryptocurrencies? Let us know what you think about this topic in the comment section below.
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