Key Global Events
- In March, the U.S. Consumer Price Index (CPI) inflation rose to 3.5% year-over-year, marking a notable increase from February’s 3.2% and surpassing the anticipated 3.4%. This acceleration, the largest in six months, was driven primarily by high costs in gasoline and rentals.
- Minutes from the March meeting of the U.S. Federal Open Market Committee (FOMC) indicated a concern among officials that inflation was not decreasing as expected. Although the Federal Reserve maintained steady interest rates, there was a consensus on needing more assurance that inflation would trend towards their 2% goal. However, officials are hopeful about beginning to reduce rates later in the year.
U.S. Market Indices
- U.S. stock markets experienced a downturn following the unexpected rise in March’s CPI inflation, which dampened hopes for a rate cut in June. The S&P 500 fell by 0.95% to close at 5,160.64, while the Dow Jones Industrial Average decreased by 1.09% to close at 38,461.51.
- U.S. Treasury yields saw an increase as the unexpected inflation data adjusted market expectations regarding rate cuts later this year. Notably, yields increased by an average of 14.94 basis points, with the 2-year yield ending at 4.98% (up 23.00 bps) and the 10-year yield closing at 4.55% (up 18.20 bps).
- The U.S. dollar gained strength against the backdrop of higher-than-expected inflation figures, which moderated the likelihood of imminent rate cuts. The Dollar Index (DXY) finished the day at 105.25, up by 1.05%.
Crypto Metaverse
- Ripple CEO Brad Garlinghouse expressed optimism regarding the growth of the cryptocurrency market, anticipating that its total value could double this year. He attributes this potential surge to significant developments, including the introduction of the first U.S. spot bitcoin exchange-traded funds and the forthcoming bitcoin “halving” event. “
- The overall market cap of the crypto industry is likely to double by the end of this year, influenced by a range of macroeconomic factors,” Garlinghouse noted.
- Additionally, he mentioned that favorable regulatory developments in the United States could further propel the market to reach new heights.
