The dispute between the government and the Republican opposition in the United States over the ceiling of the crisis left the markets on the brink of a nervous breakdown.. Biden and McCarthy are negotiating hard for a long overdue solution Some credit rating agencies have threatened to downgrade US debt securities.
This is happening in a context where real economy numbers are promising, despite persistent inflation. The level of activity, the sale of durable goods, and personal spending indicate that the world’s leading economy is nowhere near recession.
With these numbers in hand, Days ago, Fed directors threatened to continue raising interest rates. They announced that there would be two more increases in the cost of money this year, which today is 5.25%. At the June 14 meeting, an increase of at least a quarter point is expected to be announced.
Why is that?, dear reader, you will wonder. Because the decline in the inflation rate is much slower than the Fed staff would have liked, a year ago the annual retail cost of living was 9%; Today it stands at 4.9%.
The markets are trying to stay afloat. The Dow Jones closed the week at 33,200 (it was 36,500 when the rate hike began), with a weekly loss of 1%. The S&P finished at 4,211 units. The good performance of companies in the technology sector in recent days has seen the Nasdaq recover by 2.51% in the past five rounds. Nvidia shares were the gainers this week, with a cumulative revaluation of 24%, due to expectations created by the AI boom.
In turn, there is an interesting process Fly to quality Which puts the dollar at 1.07 against the euro. We see once again the onslaught of the US state bureaucracy against cryptocurrencies. They want to avoid a popular exodus towards these new forms of investment with more controls on investors and banks.
Bitcoin created a floor in the $23,000 region and Ethereum at $1,700, but failed to gain volume. In fact, 20% of the peak transactions are negotiated. Thus, it is very difficult to predict a bullish cycle in cryptocurrencies in the near future.
On the other hand, we have seen that Ledger, the main provider of cold wallets (Cool wallets, a kind of flash drive to store cryptocurrency on your own), has suffered a crisis of confidence, as it has jeopardized the requirement of investor anonymity. The French company found itself in a PR nightmare after it revealed on May 16th plans to introduce a tool called Payback. He had to back off.
In Argentina, we had a short financial week, with the dollar close to 500 pesos. Markets wonder, one day and the next, whether the government will be able to obtain – from somewhere offshore – the dollars needed to avoid another currency trade or banking event ahead of the move.
Meanwhile, inflation continues to exacerbate the exchange rate lag, which I would estimate at 50%. time is running out. Uncertainty – not bad to remember – generates more volatility and the desire to control the US currency.
