Market Commentary

CPI Continues to Grow | Market Analysis for the Busy Investor

September 20, 2022

CEO and Co-Founder Ivan Zhang tackles the top market observations to start your week better informed.

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CPI keeps growing

TL;DR: Expect a 75 bps hike at the next Fed meeting.

The Consumer Price Index took over the news cycle last week as inflation reared its head with a 9.1% average increase. Expectations were that CPI would be in the mid 8’s. Essentially, the Fed will stay the course and implement another 50 to 75 bps rate hike at the next meeting. What does that mean for us? Expect things to worsen before they get better as the Fed tries to tamp down the economy. 

Europe takes a softer stance

TL;DR: While the US is keen to starve inflation with high rate hikes, Europe seems to be dragging its feet.

While the Fed in the US is implementing extreme measures to cool down inflation, Europe seems to be on summer holiday. The ECB is expected to hike rates by 25 bps, significantly lower than the US strategy. As we’ve seen, the Euro dropped clearly below 1 USD spurring international companies and travelers to take advantage of the unique opportunity. Will this last? The jury is still out, but for the time being, expect to see a strong USD global presence for many months ahead.

Crypto thaw?

TL;DR: In the middle of the crypto winter, we seem to be gaining some ground as ETH almost hits $1,500.

In the dead of crypto winter, it looks like some digital assets are ready for a beach holiday. ETH rebounded this weekend, reaching almost $1,500 in value. It’s looking like the negative spiral of liquidations has finally broken, and the sky is clearing. What’s causing this spike? Potentially investors that put short positions on ETH were caught off guard, and it was compounded by the weekend when it was difficult to send fiat funds to meet margin calls. 

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