Cryptocurrency markets are once again in a negative phase, and this time, macroeconomic developments are playing a determining role. US stocks recorded a 2% drop, sending shockwaves through cryptocurrencies. Over the past two years, these digital currencies have been closely linked to global economic events.
The recent Federal Reserve meeting left more uncertainty than clarity, but the data points toward an interest rate hike at the November meeting. US Treasury Secretary Janet Yellen's remarks about the country's growing debt and its relations with China have also weighed on investor sentiment.
Inflation, according to the target chart, is on track to exceed 2% by the end of 2025. This situation has led several members of the Federal Reserve, including Loretta Mester, to suggest the possibility of a rate increase in November.
Such statements, along with rising US Treasury yields and a stronger dollar, have put cryptocurrencies at a disadvantage.
However, in contrast, the American housing market is booming. Home prices hit record highs in July, rising 40% over the past three years. Surprisingly, affordability is also at historic levels, even though banks have tightened their lending policies.
These mixed economic developments are leaving cryptocurrency investors feeling uncertain about the future.
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