INSUBCONTINENT EXCLUSIVE:
escalating trade war between the US and China
Demand for alternative hedge instruments typically weakens in such scenarios, yet Bitcoin (BTC) neared $109,000, while Ether (ETH) posted a
3% gain, trading above $2,800.S&P 500 futures (left) vs
removing retaliatory taxes
economic fallout.The 2.4% annual inflation rate reported by the US Consumer Price Index offered some relief, especially in the context of
rising price concerns driven by the ongoing global trade war
Usually, these developments would boost confidence in stocks and strengthen the US dollar, but investors are still uneasy about the growing
US government debt.US Dollar Index (DXY)
Source: TradingView / CointelegraphThe US Dollar Index (DXY) fell to its lowest point in seven weeks, indicating that investors are
retreating from the dollar
In response, market participants are reallocating toward other major fiat currencies.On Tuesday, JPMorgan Chase CEO Jamie Dimon reportedly
highlighted the risks posed by private credit, an area that could become problematic during an economic downturn
The longer the US Federal Reserve maintains current interest rates, the more likely a recession becomes.Implied Fed rates expectations for
Source: CME FedWatch.According to the CME FedWatch tool, futures-based probabilities for the year-end Fed Funds target rate have shifted
notably over the past month
Markets now imply a 73% chance that rates will be at 3.75% or higher by December, up from a 42.5% chance one month ago.Related: Bank of
cost of issuing and refinancing debt, whether for individuals, companies or the government
Additionally, interest rates that exceed expected inflation tend to weigh on risk-on assets as fixed-income yields get more attractive.The
initial signs of decoupling from the stock market suggest that investors are seeking higher returns amid signs that the US government is
prepared to raise the debt ceiling
Consequently, regardless of economic growth prospects, cryptocurrencies are seen as benefiting from this environment as traders expect added
liquidity from the central banks.This article is for general information purposes and is not intended to be and should not be taken as legal
