“Bitcoin” falls to its lowest level in 2022 due to the pressure of interest rates.

At the beginning of Monday’s trading, the cryptocurrency markets
witnessed a significant decline that also affected “Bitcoin”,
which fell to its lowest level recorded in the current year 2022,
and these declines came in light of the monetary tightening policies
that reached Europe and the United States during this week
The largest digital currency “Bitcoin” fell below the level of $ 18,500 by 6.7%,
and “Ether” fell by 6.2% to levels of $ 1300,
and losses also appeared on currencies such as (XRP) and (Polkadot).

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Inflation data this week

The neutral interest rate raises a lot of controversies, and the Federal is required to implement it.

A very important week for monetary policymakers around the world to fight inflation.

Inflation data this week

Investors’ attention is directed to the US Federal Reserve data,
which is related to facing the price pressures experienced by the US economy,
and therefore we may find some fluctuations in the huge and
expected interest rates during the current week,
and this and US stock futures record their presence
in the negative red zone with the rise of the dollar index,
which indicates Warning signs for the markets.

Bitcoin is waiting for the headwinds to change

In light of a significant decline in the cryptocurrency market this year,
many analysts expect Bitcoin to rise again to the level of 100,000 dollars,
but after all the current pressures have ended and the trend changed,
the “Bitcoin” currency will eventually win and regain strength again.
For the digital currency market,
waiting for the markets to move by about 100 basis points during
the current week may greatly help in accelerating this process,
and currently, we find global central banks stimulating after
they were initially slow in raising interest rates to combat inflation.

The neutral interest rate raises a lot of controversies, and the Federal is required to implement it.

In light of the high inflation in the United States and its direct impact on the growth of the economy,
central banks are considering radical solutions,
including the application of neutral interest,
which will not have a less impact on the economy,
and this is based on an interest rate that moves at certain levels that
work to speed up and slow down certain things such as
projects Construction and car purchases,
known as the “neutral interest rate”,
and central banks find themselves in front of a very important option,
which is to rely on it as an important step at present amid tightening monetary policies

Learn about the “neutral interest rate”

The most accurate description of the neutral interest rate is what
Vice President of the Federal Reserve “Lyle Brainard” said in 2018:
It works to keep production growth close to the potential rate and also be in an environment
with good indicators of full employment and stable inflation,
and therefore this neutral rate is a level that Monetary policy is a catalyst for economic growth.

The importance of the “neutral interest rate”

The importance of relying on the “neutral interest rate” can be summarized in the first reason,
which is the attempt to reach a consensus regarding the monetary policies of central banks
and the expectations of the levels of neutral interest rates for it,
and the second reason is to control the economy more
flexibly in terms of moving interest rates in the short term,
and that If the economy suffers from a slowdown,
they resort to reducing interest rates below
the neutral interest levels to promote growth and vice versa,
in the case of high inflation, interest rates will be kept
above the neutral level to slow the pace of the economy.

The effect of neutral interest rates on the Fed’s business

There was a great debate regarding the US interest rate at 2.5%
and whether it was neutral or not,
and therefore doubts hover around this matter,
which has not yet been resolved, and in light of this,
the Fed does not take any fateful decisions based
on that in light of the current circumstances.
Ordinary, such as closures due to the epidemic
and the Russian invasion and the consequences arising from it,
but in any case, we are waiting for inflation to decline to open
the door for the Federal Reserve to try to approach the neutral interest rate.

article name “Bitcoin” falls to its lowest level in 2022

A very important week for monetary policymakers around the world to fight inflation.

After a difficult week last week for the markets,
you are also waiting for a crucial and very important current week
regarding decisions to confront inflation by policymakers around the world,
and at the level of the United States,
which is seeking a new raise by about 75 basis points,
and also the Swedish, Swiss and Norway raise interest rates tomorrow,
Tuesday, The Bank of England is awaiting the decision to raise next Thursday,
with Japan reserving their position next Friday, despite the current situation.

Investors find themselves facing great tensions in the markets
and perhaps a further regression to worse matters,
which also affected the commodity and real estate market,
which was largely stable during the past year.

High-interest rates in Australia affect home sales

In May of this year, the Reserve Bank of Australia raised interest rates
by 2.25 percentage points in an effort to combat high inflation,
but officials believe that higher interest rates
will have an impact on the real estate market,
but at the same time, there is less uncertainty
about the size and timing of The impact on the housing market,
and this was explained by the head of local markets on Monday that
the size of the monetary tightening will weaken the volume of loans by about 20%,
in addition to the fact that the high interest is a reason to limit the borrowing ability
and works to raise loan repayment instalments. It is worth noting
that Australian house prices recorded A decline since the beginning of the tightening
by the Australian centre, where the leading market leaders decline in house prices,
with prices falling at the fastest pace since 1983 nationally.

Oil prices under pressure from interest rate hike expectations

In light of the dollar’s rise against the rest of the currencies and
ahead of expectations that an upcoming large interest rate hike in the United States,
Europe and Asia this week, oil prices fell,
with more concerns about a slowdown in global economic growth,
which negatively affects the expectations of energy demand.
And Brent crude scored $90 a barrel, a decline of about 2%,
and in light of this situation, any intervention by central banks
to control high inflation may weaken economic growth,
which is what all expectations indicate.

article name “Bitcoin” falls to its lowest level in 2022

“Bitcoin” falls to its lowest level in 2022

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