With War Starting and Markets Dropping, Questions Multiply About Central Banks’ Policies
As bitcoin (BTC) and crypto markets in general have gone down over the past day and week, amid the escalating tension between Russia and Ukraine, sanctions imposed on the former, and today’s invasion of the latter – more questions keep popping up about the EU and the US central banks’ upcoming decisions.
According to Noelle Acheson, the head of markets insights at major crypto trading firm Genesis Global Trading, there are still plenty of questions left on the table to be answered regarding the US Federal Reserve's strategy. These include if the crypto markets' move would have an impact on that strategy, as well as how the war Russia started against Ukraine will impact its decision on the much-discussed rate hikes.
Per Acheson, “one thing this does do is diminish the importance of the next US CPI [consumer price index] release, due Mar 10.”
“While it would have come too late to impact the rate hikes expected mid-March, it stood to be a strong hint as to how many rate hikes the Fed would squeeze in to 2022 overall,” it added.
Meanwhile, the European Central Bank (ECB) could still be agreeing on a faster wind-down of asset purchases at its next policy meeting on March 10, despite Russia’s invasion of Ukraine, according to Governing Council member Gabriel Makhlouf.
Bloomberg quoted Makhlouf, who heads the Irish central bank, as stating that, while it’s too early to estimate the invasion’s effects on the economy, the sanctions against Russia and a possible rise in energy prices are making it more difficult for the ECB to counter inflation without hurting the economy.
He added that what can currently be seen is the euro area recovering from the COVID-19 restrictions – consumption is increasing and the labor market is healthier.
“It
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