FED HIKED RATES AS EXPECTED BY 0,25% TO 1,75%-2,00% - TWO MORE HIKES IN 2018 - CRYPTO CRASH GOES ON - Bitcoin down to 4 month low

FED HIKED RATES AS EXPECTED BY 0,25% TO 1,75%-2,00% - TWO MORE HIKES IN 2018  -

CRYPTO CRASH GOES ON 

The FED did exactly what was already expected, but signalled two more hikes in 2018 instead of 1 following strong economy numbers. Just today producer price index jumped to its highest since 2011 proving that inflation is still here contrarian to what officially is announced. But what everyone scares the most is the inverted yield curve. The yield curve refers to the relationship between short and long term interest rates of fixed income securities. And the inverted yield curve occurs when short term interest rates exceed long term interest rates. However an inverted yield curve is usually to be followed by an recession.  The curve signals that the economy outlook on the long run is everything but good, while the short term outlook is strong so therefore long term interest rates will remain flat or even fall further while the short term interest rates will accelerate. In history inverted yield curves are very rare and happened only four times after world war II, 1956, 1990,2000 and 2008. But ever since then it preceding the next recession. And most important is the impact of an inverted yield curve on consumers. Homebuyers usually finance their properties with short term interest rates. And when short term rates are higher than long term rates – payments will increase. And the same effect is seen on credit card debits or account debits.  

However equity markets remain flat, Gold is slightly up to $1298 and the sell-off in crypto currencies still goes on. Bitcoins are down by another 6,2% to $6293 a four months low,  while Ethereum is down by 8,12% to $469 and Litecoins are down by 11% to $92.