Stocks, precious metals, and cryptocurrencies have been on a tear for the last three weeks of 2023, and all eyes are now focused on the upcoming 11-day meeting of the Federal Open Market Committee (FOMC). On Friday, Federal Reserve Chair Christopher Waller said he would favor a quarter-point increase in interest rates at the next meeting of the Federal Open Market Committee. Analysts believe that the current market paths will depend on the outcome of the upcoming meeting of the Federal Reserve.
Markets Still on Brink Ahead of Fed Meeting Despite Stocks, Cryptocurrencies, and Precious Metals Rising in 2023
On Saturday, January 21, 2023, at 2:45 PM ET, the global cryptocurrency market cap was up 5.87% from the previous day and hovered around $1.06 trillion in value. The leading cryptocurrency asset, Bitcoin (BTC), is up 11.63% against the US dollar in the past seven days. The second leading digital currency by market valuation, Ethereum (ETH), rose 8.33% that week against the dollar. The increase in the value of these two crypto-assets has also increased the USD value of thousands of digital currencies below BTC and ETH.
The day before, on Friday, January 20th, stock markets closed higher for the day. The four major stocks (S&P 500, Dow Jones, Nasdaq, and Russell 2000) finished 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 rose 1.89%, the Russell 2000 (RUT) jumped 1.69%, and the Dow rose 1% on Friday. US stocks posted their second straight week of gains so far this year. The RUT small-cap stock market index is up 7.1% this year, with small-cap stocks leading the stock race in 2023.
Precious metals also performed well with an ounce of gold trading at $1,927.30 per unit and silver trading at $24.01 an ounce. Like cryptocurrencies and stocks, the precious metal rebounded in 2023, erasing the losses that occurred in December 2022. Gold enthusiast Peter Schiff believes that the price of the precious yellow metal will rise this year. “Gold is now trading above $1,934, its highest price since April of 2022,” Schiff chirp On January 19 “However, gold stocks have yet to reach the highs they hit last week. In fact, gold stocks need to rise 30% from here just to get back to where they were trading in April of 2022. This selling may not last long.
Speaking with Kitco News, Edward Moya, chief market analyst at OANDA, explained that gold prices will remain indifferent until the Federal Reserve meeting in February 2023. “It will be choppy,” Moya said. “I am neutral on gold until the Fed meeting on February 1st. The main resistance is at $2000. But I would be surprised if we move above $1950. It is likely that we will consolidate here until the Fed meeting,” the market analyst added. Market analysts and macroeconomists have no idea what the Fed will do at the FOMC meeting.Some believe that the aggressive tightening schedule will continue, while others expect the Fed to ease into a “soft landing.”
The Biden administration and White House economist Heather Boshey told Reuters that current leaders do not expect a recession. “The steps have been taken and we look very well positioned to have that soft landing that everyone is talking about,” Bushey insisted. On Friday, Federal Reserve Governor Christopher Waller told reporters at a Council on Foreign Relations conference in New York that he favors fewer rate hikes than the previous seven. So far, the Fed has implemented seven interest rate increases in 2022, two of which were half-point increases and five were three-quarter point increases. Waller can envision a quarter-point increase at the next FOMC meeting next month.
“I currently favor a 25 basis point increase at the next FOMC meeting at the end of this month,” Waller told the press. “Furthermore, we still have a long way to go toward our 2 percent inflation target, and I expect to support continued tightening of monetary policy,” the Fed governor added.
It is very likely that the three major markets (precious metals, cryptocurrencies, and stocks) will react one way or another after the next decision of the Federal Reserve. Many believe that the decision of the upcoming FOMC meeting will depend entirely on inflation measures. US President Joe Biden has been tweeting about the US economy over the weekend because he believes the country is on the road to recovery. “Annual inflation has been down for six straight months and gas is down $1.70 from its peak,” Biden said chirp Saturday morning at 10:25 a.m. ET. “We are successfully transitioning from economic recovery to stable growth,” Biden added.
What do you think of the outcome of the upcoming FOMC meeting and how do you think it will affect the current market paths for stocks, precious metals and cryptocurrencies? Tell us what you think about it in the comments section below.
Image credits: shutterstock, pixabay, wikicommons
Not giving an opinion: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the Company nor the author shall be liable, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.