JPMorgan CEO Chase believes a series of rate hikes will change the economy as we’ve known it for 13 years
According to Walter Bloomberg’s Twitter account, JPMorgan Chase CEO Jamie Dimon has stated that the four 0.25% key interest rate increases would change the shape of the U.S. economy. Previously, the hint from the Fed about the rate increase in March crashed both the stock and digital assets markets.
What does a rate hike do for the economy and the market?
The policy rate is one of the main tools for strengthening a country’s monetary policy and national currency, which creates more pleasant conditions for foreign investors who stimulate the economy by buying government bonds and citizens of a country, who are more likely to deposit their funds in banks. rather than on the stock market.
Previously, the U.S. practiced quantitative easing, a form of monetary policy in which the central bank incentivizes lending and investment by purchasing long-term securities on the open market.
Financial experts note that quantitative easing was one of the main drivers of a nearly 13-year rise in the US stock market.
How does a high key rate affect the crypto market?
In addition to incentivizing investment in national currencies, high key rates create conditions in which traders are more likely to invest in risk-off assets like commodities and precious metals rather than risky assets like crypto.
Previously, U.Today covered one of the main reasons for the downturn in the Bitcoin and cryptocurrency market which was reflected in the stock market as well. The two crashes came after the Fed authorized a policy rate hike in March of this year.
At the same time, Jamie Dimon, BlackRock and JPMorgan strategists have stated that the market is currently oversold and that we might see a short-term rebound.
