#46 Daily Financial News Round Up - Dec 16,2021
Market Snapshot
Dow Jones is down by 0.34%, S&P500 is down by 1.12%, and Nasdaq Composite is down by 2.74%.
How’s crypto-market?
Bitcoin is down by 2.34% in the last 24 hours to the price $47,916.20. XRP, Solana and Polygon are the top three traded cryptocurrencies in the last 24 hours. The top 3 gainers are Yearn Finance, Storj and Celo. The top 3 losers are Aragon, Dogecoin, and Internet Computer.
What news caught my attention?
While raising interest rates is considered a tool to curb inflation, raising interest rates too soon while not meeting employment goals can turn out to be a costly mistake. While the markets presume that higher interest rates could be where their risk comes from, the absolute risk lies in not meeting employment goals. While it might seem like the labour market is well-matched due to the record-low unemployment numbers, it is essential to note that the employment numbers remain far below the pre-pandemic level. Raising the interest rates presents a rosy picture of an efficient labour market when not the case.
Who gains the most from higher interest rates? Banks. Banks like JP Morgan, Wells Fargo and Bank of America can expect to earn more than $5 billion additional revenue due to the expected higher interest rates.
My Takeaways:
Balancing inflation goals with unemployment goals is very challenging!