Market Watch. The printing press in the USA will work to the bitter end

Financial and commodity markets analytics

Market Watch review.

In today's release, we’ll cover the following topics:

  • US Federal Reserve meeting results.
  • Bitcoin has updated its historical high.
  • Bank of England meeting results. 

The printing press in the United States will work to the bitter end - this is the position taken by the American regulator. 

The Open Market Committee of the US Federal Reserve System at its last meeting this year left the parameters of monetary policy unchanged. Buyback volumes remain at an unprecedented high, printing $120 billion monthly.

In the macroeconomic forecast published by the Fed, the economy completely closes the output gap in 2022, which could create inflationary risks. Keeping the rate close to zero until 2023 and even beyond is possible, as the Fed must first stop QE before raising it. When implementing its forecast, the US Federal Reserve will be able to move to reduce QE in 2022 and will begin to prepare the market for this step in 2021. 

This speech marked the beginning of a large-scale rally in the markets that lasted all day yesterday.

On December 17, on the Binance crypto exchange, the bitcoin rate for the first time in history reached $23,114. The cost of the first cryptocurrency began to rise sharply on December 11 from a local minimum of $17.5 thousand. Over the past 6 days, it has increased by 30%, over the past day - by $3620, or 18%.

The vast majority of crypto-enthusiasts are confident Bitcoin quotes will rise at least until the end of the first quarter of 2021 and may continue the upward movement until September. According to experts, this trend will spread to most other cryptocurrencies. The growth will be supported by investments of large companies and the unstable situation in the global economy. 

If the recovery in consumer demand turns out to be long, then we can expect the next emission of money in developed countries and, as a result, the strengthening of digital currencies, experts say.

At the last meeting, the Monetary Policy Committee of the Bank of England voted unanimously to maintain the official interest rate at the previous level of 0.1%. The committee also voted to maintain the volume of stimulus to the economy at £120 billion. 

In addition, the regulator launched a previously announced program to purchase UK government bonds worth £150 billion. 

The pound reacts quite naturally, according to the formula "the worse, the better", updating multi-year highs.

Closely monitor the news background and be prepared for all the surprises of the market.


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