UN Implores US Fed to Halt Rate Hikes, Better Days for Crypto
The Federal Reserve’s Chairman said during the Jackson Hole Conference held in September that rates will keep going up. Crypto prices crashed immediately as a result of that.
Appeal on Rate Hikes
The United Nations has called on the US Feds, in a sparsely detailed reaction, not to keep raising rates. The UN equally extended the call to other major central banks in the West.
The Feds, followed by other major central banks globally, increased their interest rates intending to fight inflation and bring it down. The UN also warned that the continuous rate increases could lead to a global financial crisis.
The UN, via its Conference on Trade and Development, released its 2022 Trade and Development report on Monday. The report reflected the body’s fears of inflation and the likelihood of a global financial catastrophe from rate increases. The report says the effect of rigid financial policies will be felt the most in developing countries.
The UN Conference report said central banks cannot curb inflation by depending on increasing interest rates. Doing so without expecting a recession is a bad gamble. The market reacted poorly to the Fed Chair’s announcement that rates must keep going up to fight inflation.
The price of cryptocurrencies has been increasingly connected with activities in the stock market for some months. The price of Bitcoin, as well as other top cryptos, has declined along with stocks.
According to Bitfinex analysts, the cryptocurrency market is sensitive to policy statements. It has also been highly affected by recent Federal Reserve rate increases. Bitfinex is a crypto exchange and its statement was sent via mail.
Crypto Might Break Out
A report from Coingecko shows Bitcoin trading at $19,603 as of the time of this report. It is up by 3% within the past 7 days.
There, however, have been several predictions on the possible behavior of crypto prices in the event of a recession. The most prominent consensus says crypto prices will collapse if the stock market collapses. There is also an opposing position to that.
A US investor, Stan, thinks a recession will happen in 2023. He also believes that it would be a great period for the crypto market generally.
Stan established that the increasing mistrust of governments and central banks might serve the interest of cryptocurrencies. He said Bitcoin is not centralized so analysts think it would break from the pack and its price will rise.
Stan went further to state that once Bitcoin rallies, other major tokens will do the same. This is irrespective of if the Feds raise their rates or not. But if the Feds reduce their current position, it would have a positive effect on crypto prices.
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