Aurelia Butler

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    in Economy

    When you wish upon R*

    The headline of this fascinating JPMorgan report is so good that we’re appropriating it for our write-up. R* is economics jargon for a natural or “neutral” interest that neither fuels nor slows inflation economic growth. The R stands for interest rates in economic equations, and the star represents its long-term nature.Aside from lending itself to puns (the fault in R*, falling R*, twinkle twinkle little R* you get the drift) it’s a pretty important theoretical concept. The view that R* was close to zero in real, inflation-adjusted terms was one of the main drivers behind central banks pushing rates to zero — and below, in some cases — over the past decade.It is even more important right now, when many central banks have jacked up rates to contain inflation, but are facing an increasingly tricky balancing act between tightening policy without causing economic calamity. But is R* actually still close to zero?In a report published earlier this week, JPMorgan’s chief economist Bruce Kasman argued that it may now be creeping higher. That would mean interest rates will have to stay higher for longer than many people expect.A year ago, we argued it was inappropriate to accept the widely held view expressed by central banks that the inflation process would remained anchored by the credibility of their medium-term commitments. Confidence in the inflation process did indeed erode in the face of a broadening inflation surge last year, despite well anchored medium-term expectations. This erosion in faith helps explain the dramatic acceleration in the pace of policy tightening.We believe faith in another pillar underlying central bank thinking is on track to erode this year: the notion that DM neutral real policy rates stand close to zero. Identifying a “neutral” rate is important as central banks consider how far they continue in the policy adjustment process currently underway. DM central banks appear to be looking for a position whereby holding policy rates at an appropriate level above neutral — a high-for-long stance — can be anticipated to gradually ease labor market tightness and lower inflation.Here is JPMorgan’s chart of its estimates for various neutral rates at the moment. Remember that these are real R-stars, ie after inflation. Kasman argues that a “high-for-long strategy” is now necessary because of disappointing economic results of the “low-for-long” post-financial crisis approach. It’s like the pandemic and the stimulus unleashed to combat its economic impact were a defibrillator shock to the economic system. We attribute the ineffectiveness of last decade’s low-for-long stances to powerful disinflationary forces unleashed by the GFC outside the control of central banks. Importantly, conditions have changed dramatically. In contrast to last decade’s post-GFC balance sheet adjustment and regulatory tightening, the pandemic and has improved private sector balance sheets and created pent-up demand. In addition, fiscal policy shocks during this cycle have generally been positive thus far, a radically different backdrop to the aggressive European and US tightening through the first half of the last expansion. Finally, the supply shocks related to the pandemic have altered the inflation process in a way that is likely raising short-term inflation risk premia. In all, these developments suggest that neutral policy rates have moved higher from estimates at the end of the last expansion.Of course, as Kasman points out, central banks in the developed world have on average jacked up interest rates by 400 basis points over the past year, the most aggressive increase in over four decades. Whether it will be enough, just right, or too much is still unclear. Like many economic concepts, even R*’s historical values are inherently uncertain. And the actual current level of R* “will be obscured for some time”, as Kasman puts it.But the surprising economic resilience we’ve seen lately is a good indicator that R* is indeed higher than many economists thought just a year ago. That has big implications for monetary policy in the coming years.You can read the full report here. More

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    in Economy

    Global shares sink, dollar soars on rate-hike outlook

    LONDON (Reuters) -Stock markets dropped across the globe on Friday and the dollar leapt to six-week highs as jobs data revived expectations the U.S. central bank would stick to its monetary tightening path.Data from the U.S. Labor Department overnight showed monthly producer prices had accelerated in January and the number of Americans filing new claims for unemployment benefits had unexpectedly fallen last week.The data was taken as a further sign that price pressures may remain stickier than markets believed at the start of the year, adding to inflation and jobs data out since the start of February that has sent jitters through global markets. MSCI’s broadest index of world stocks fell 0.4% at 1248 GMT to one-week lows of 645.65.MSCI’s broadest index of Asia-Pacific shares outside Japan fell 1.35% to 529.53 at 1248 GMT, its lowest since Jan. 9. The index is down 3% for the month and set for its third-straight week of losses. In Europe, the pan-European STOXX 600 index dropped 0.38%, set for its first daily fall this week. The German DAX was down 0.93%. French blue chip stocks and Britain’s FTSE slipped from all-time highs, down 0.66% and 0.16% respectively, all by 1248 GMT. Stock performance across the Atlantic was also set to follow suit with S&P 500 futures down 0.6%. Traders have raised their bets on how far they see the Fed hiking in recent sessions, and are now pricing in a peak at around 5.3% in July. Bets on a rate cut at year-end have declined, with traders pricing in only a 75% chance of a 25 bps rate cut in December. “Inflation doesn’t go up in a straight line and it won’t come down in a straight line. This week has been a wake up call for a lot of people,” said Michael Hewson, chief market analyst at CMC Markets UK. The buoyancy in U.S. markets since the start of the year was predicated on inflation peaking and then dropping sharply, he said. “For those looking for U.S. rate cuts at the end of this year, that’s now gone. Two-year yields on Treasuries are finally where they should be,” he added. Bets on higher peak rates have pushed two-year U.S. Treasury yields, sensitive to interest rate expectations, to three-month highs at 4.69%. The yield on 10-year Treasuries was up about 5 basis points at 3.88% on Friday at 1248 GMT. Boosted by bets on higher rates, the dollar index, which measures the U.S. currency against six major rivals, rose as much as 0.4% on Friday to 104.24, a fresh six-week high. That hurt the euro and sterling, with both falling to their lowest in over a month. The euro was down 0.5% at 1248 GMT at $1.0618, while sterling was last trading at $1.1943, down 0.4% on the day.It’s hard to gauge how markets will interpret the Fed’s next moves on inflation, said Florian Ielpo, head of macro at Lombard Odier Asset Management. “The markets are torn between two instruments. Intra-day stock prices and credit spreads see a lot of volatility and nervousness while there has been no surge in implied volatility options,” said Ielpo. Two Fed officials said on Thursday the U.S. central bank probably should have lifted interest rates more than it did earlier this month, and they warned that additional rises in borrowing costs were essential to lower inflation back to desired levels.At its Jan. 31 to Feb. 1 policy meeting, the Fed opted to moderate the pace of interest rate rises, lifting rates by 25 basis points to the 4.50%-4.75% range after a series of jumbo rate increases last year.Elsewhere, U.S. crude fell 3.30% to $75.91 per barrel and Brent was at $82.53, down over 3% on the day at the time of writing. [O/R] More

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    in Economy

    ECB’s Villeroy sees summer rate peak, no cut this year

    In an effort to steer record inflation towards its 2% target, the ECB has hiked rates by a combined 300 basis points to 2.5% since last July and promised to deliver a further 50 basis point increase in March.In a speech to financial analysts, Villeroy, who is also governor of the French central bank, said that rates would then “probably” reach their peak in the summer, at the latest by September.Markets took the ECB’s February policy statement as a signal that rates could peak at a lower level than earlier thought and investors quickly priced out a 25 basis point rate hike. Subsequent pushback by a plethora of policymakers reversed market moves, however, and the terminal rate is now seen around 3.75%, suggesting another 125 basis points of rate hikes, including the 50 basis point move in March. Villeroy said that how long interest rates are kept at the peak were also key, adding that they would be kept high as long as necessary to steer inflation back towards the ECB’s 2% target.He said that the question of when rate cuts could come lay further in the future and was “surely not for this year”. He added that it would depend on not only on overall inflation coming down, but also underlying inflation, which excludes volatile items like energy prices. More

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    in Cryptocurrency

    Cardano’s Charles Hoskinson Defends His Stance on Contingent Staking

    The creator of Cardano Charles Hoskinson addressed some of the “misrepresentations” regarding the idea of contingent staking on Twitter. In one of his recent tweets, he was seen exchanging words with the founder of Mehen Group Matthew Plomin. This was in response to Plomin’s recent tweet on how regulators can kill permissionless staking.However, Hoskinson stated that his proposal is madness. He also mentioned:Hoskinson also questioned Plomin on why he ignored the contractual part of ISPOs. He also mentioned that Plomin completely threw that part out and said that he is advocating taking customer funds upfront and then getting signatures later.Plomin also defended his proposal and stated that the main issue with contingent staking is that it changes the nature of the relationship between the SPO and the delegator. Hoskinson replied to the tweet, stating that it is a new business model and that every single non-CS staking pool is operating and still around.Hoskinson also recently released a tweet yesterday, in which he expressed his disappointment that people couldn’t understand a basic concept and continued to misrepresent it. He also cleared the air that contingent staking doesn’t replace normal staking. He asserts that contingent staking neither substitutes for standard staking nor private pools, nor does it impose a KYC system on Cardano.The post Cardano’s Charles Hoskinson Defends His Stance on Contingent Staking appeared first on Coin Edition.See original on CoinEdition More

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    in Cryptocurrency

    MAGIC Price Prediction 2023-2030: Will MAGIC Price Hit $4 Soon?

    Aside from Bitcoin (BTC) and Ethereum (ETH), there are other digital currencies worth considering for people looking to diversify their portfolios and get experience with new cryptocurrencies, MAGIC (MAGIC) is one of them.The Treasure metaverse is a decentralized non-fungible token (NFT) ecosystem for metaverse projects, and MAGIC is its native token. The MAGIC token is the only token used for market transactions and is also used to control ecosystem activity.If you are interested in the future of MAGIC and want to know its predicted value for 2023, 2024, 2025, and 2030, keep reading!Treasure is the decentralized video gaming console that brings games and communities together through bottom-up driven IP and infrastructure, united by a shared set of composable resources. MAGIC is the utility token of Treasure, an Arbitrum-based NFT ecosystem.The Treasure ecosystem is underpinned by $MAGIC, a fair launch token that drives essential infrastructure and operates as a reserve asset across partner game cartridges. Mining creates a virtuous circle for both MAGIC and real treasures. MAGIC is perpetually placed in staking or LP positions, reducing the amount of tokens available.Over time, Treasure aspires to establish itself as the epicenter of decentralization within the NFT ecosystem. The DAO will start developing decentralized rivals to current NFT goods, utilizing this income to launch new initiatives and advance ongoing ones. The development of decentralized crypto-economic primitives that may serve as “real world” economic assets is facilitated by MAGIC, which functions as a flywheel to boost decentralization in the metaverse.Furthermore, the MAGIC mine’s architecture generated substantial rewards for users who were prepared to lock up their MAGIC for extended periods. These users were crucial in developing liquidity for the protocol and showed tremendous faith in its future. This group proved to be the greatest protocol stewards and hence the best viable DAO trustees.Investors are shilling on Twitter that investing in MAGIC was worth it.Also analysts believe that we can expect MAGIC to rise higher than the current price zone.MAGIC (MAGIC), which has a total supply of 339,645,510 MAGIC, is trading at over $0.628 on CoinMarketCap. The 24-hour trading volume for MAGIC is $29,625,479, up by 45.55%. And during the past 24 hours, the price of MAGIC has decreased by 0.32%.The most well-liked crypto exchanges for trading MAGIC are Binance, Coinbase (NASDAQ:COIN), Sushiswap, Huobi, Gate.io and OKX. Let’s continue looking at MAGIC prices until 2023.On CoinMarketCap’s list of the largest cryptocurrencies, MAGIC is ranked 148th by market capitalization. Will the most recent MAGIC additions, upgrades, and tweaks lead to a price increase? Let’s first concentrate on the MAGIC price projection charts from this article.MAGIC Price Analysis – Keltner ChannelMAGIC/USDT 4-Hour Chart Showing Keltner Channel (Source: TradingView)When volatility bands are placed on each side of an asset’s price, the Keltner Channel can be used to detect a trend. The Keltner Channel signals for MAGIC/USDT can be used to forecast the price of MAGIC (MAGIC). The price is approaching the upper trendline of the channel’s first half, indicating that the market has risen slightly after falling for several days. We should wait for a reversal or a better entry point in order to increase the reward-to-risk ratio and achieve a better risk-free situation.MAGIC Price Analysis – Relative Strength IndexMAGIC/USDT 4-Hour Chart Showing Relative Strength Index (Source: TradingView)The RSI is more stable during uptrends than during downtrends. It makes sense, given that the RSI measures gains and losses. During an upswing, more big gains result in a higher RSI. In contrast, the RSI tends to stay at lower values. The 1-hour chart number is 68.08, and an RSI value above 50 indicates that the market is now in an uptrend. However, it’s close to the reversal zone of RSI 70 where we can expect a few retracements can happen. Investors should wait for more confirmation patterns before entering the trader to lower the potential risks.MAGIC Price Analysis – Moving AverageMAGIC/USDT 4-Hour Chart Showing 200-MA and 50-MA (Source: TradingView)A 4-hour MAGIC (MAGIC) 50-day Moving Averages (MAs) chart is shown above. According to the chart above, MAGIC is currently trending bullish. The candlesticks are above the 50-day moving average, indicating that the market is bullish. We can see that the golden cross occurred on January 15, 2023, and that MAGIC has continued to break its resistance areas since then.If the bulls can reclaim their thrones, we can expect MAGIC to gain bullish momentum.MAGIC/USDT 4-Hour Chart (Source: TradingView)Looking at the 4-hour chart of MAGIC/USDT, the MAGIC price has been down since it first got listed on major exchanges. MAGIC reached its highest at $2.3339 on the previous day. However, it cannot make a new high and has been consolidating since then. Moreover, MAGIC is above 200-day moving average, meaning that the market is entirely bullish.Meanwhile, our long-term MAGIC price prediction for 2023 is bullish if it cannot break the support level. We can expect MAGIC to reach $4.18 this year.MAGIC Price Prediction – Resistance and Support Levels MAGIC/USDT 4-hour Chart (Source: TradingView)The chart above shows that the price of MAGIC has decreased drastically in the past few days. Moreover, MAGIC has been up by 13.88% in the past 24 hours. Suppose the previous price decrease a few days ago is a retrace during the bull run, it might be breaking its current resistance 1 and reaching higher than $3.If MAGIC cannot break the $2.4886 level, the bears may seize control and dethrone MAGIC to a downtrend stance. In simple terms, the price of MAGIC might fall to almost the current 200-day moving average zone, which is $1.41, indicating a negative signal from the previous support level.There will be Bitcoin halving in 2024, and hence we should expect a positive trend in the market due to user sentiments and the quest by investors to accumulate more of the coin. Since the Bitcoin trend affects the direction of trade of other cryptocurrencies, we could expect MAGIC to trade at a price not below $6.8175 the end of 2023.We should expect the price of MAGIC to trade above its 2024 price due to the possibility of most cryptocurrencies breaking more psychological resistance levels due to the Bitcoin halving over the previous year. Hence, MAGIC could end 2025 by trading at around $10.4327.Since the maximum supply of MAGIC is approached by 2026, the bearish market that follows a MAGIC bullish run impacts its previous price due to the entrance of more institutional investors to its platform. With this, the cost of MAGIC could break the usual trend and trade at $14.0559 by the end of 2026.Investors expect a bullish run next year, 2028, due to Bitcoin halving. Hence, the price of MAGIC could consolidate the previous gains and even break more psychological resistance levels due to investors’ positive sentiment. Therefore, MAGIC could trade at $17.67 by the end of 2027. In 2028, there will be Bitcoin halving. Hence, the consolidating market in 2027 could be followed by a bullish run. This is due to the impact of news surrounding any year of Bitcoin halving. It is possible that the market could attain higher high values. MAGIC (MAGIC) could hit $21.29 by the end of 2028. By 2029, there could be much stability in the price of most cryptocurrencies that had stayed for over a decade. This is due to implementing lessons learned to ensure their investors retain the project’s confidence. This impact, coupled with the price surge that follows a year after Bitcoin halving, could surge the price of MAGIC to $24.9135 by the end of 2029. Also, MAGIC is likely to break its ATH value.The cryptocurrency market experienced high stability due to the holding activities of early investors so as not to lose future gains in the price of their assets. We expect the price of MAGIC (MAGIC) to trade at around $28.5327 by the end of 2030, irrespective of the previously bearish market that followed a market surge in the earlier years.According to our long-term MAGIC price estimate, MAGIC prices could reach a new all-time high this year. If the current growth rate continues, we could anticipate an average price of $68 by 2040. If the market turns bullish, the price of MAGIC could go up beyond what we predicted for 2040.According to our MAGIC forecast, the average price of MAGIC in 2050 might be above $38. If more investors are drawn to MAGIC between these years, the price of MAGIC in 2050 could be far higher than our projection.MAGIC might reach $4 in 2023 and $25 by 2030 if investors decide that MAGIC is a good investment along with mainstream cryptocurrencies like Bitcoin and Ethereum.What is Magic (MAGIC)? Treasure is the decentralized video gaming console that brings games and communities together through bottom-up driven IP and infrastructure, united by a shared set of composable resources. MAGIC is the utility token of Treasure, an Arbitrum-based NFT ecosystem.The Treasure ecosystem is underpinned by $MAGIC, a fair launch token that drives essential infrastructure and operates as a reserve asset across partner game cartridges. Mining creates a virtuous circle for both MAGIC and real treasures. MAGIC is perpetually placed in staking or LP positions, reducing the amount of tokens available.How to buy MAGIC tokens? MAGIC can be traded on many exchanges like other digital assets in the crypto world. Binance, Coinbase, Sushiswap, Huobi, Gate.io and OKX are currently the most popular cryptocurrency exchanges for trading MAGIC. Will MAGIC surpass its current ATH? Since MAGIC provides investors with several opportunities to profit from their crypto holdings, it is a good investment in 2023. Notably, MAGIC has a high possibility of surpassing its current ATH in 2025.Can MAGIC reach $10 soon? MAGIC is one of the few active crypto assets that continue to rise in value. As long as this bullish trend continues, MAGIC might break through $6 and reach as high as $10. If the current market favoring crypto continues, it will likely happen.Is MAGIC a good investment in 2023? MAGIC is expected to continue its upward trend as one of the fastest-rising cryptocurrencies. MAGIC is an excellent cryptocurrency to invest in this year, given its recent partnerships and collaborations that have improved its adoption.What Is the lowest price of MAGIC? The lowest MAGIC price is $0.1837, attained on November 18, 2021, according to CoinMarketCap.Which year was MAGIC launched? MAGIC was launched in 2022.Who are the co-founders of MAGIC? John Patten and Gaarp founded MAGIC.What is the maximum supply of MAGIC? There will be a maximum supply of 347,714,007 MAGIC.How do I store MAGIC? MAGIC can be stored in a cold wallet, hot wallet, or exchange wallet.What will be the MAGIC price in 2023? MAGIC price is expected to reach $4.18 by 2023.What will be the MAGIC price in 2024? MAGIC price is expected to reach $6.8145 by 2024.What will be the MAGIC price in 2025? MAGIC price is expected to reach $10.4327 by 2025.What will be the MAGIC price in 2026? MAGIC price is expected to reach $14.0559 by 2026.What will be the MAGIC price in 2027? MAGIC price is expected to reach $16.67 by 2027.What will be the MAGIC price in 2028? MAGIC price is expected to reach $21.29 by 2028.What will be the MAGIC price in 2029? MAGIC price is expected to reach $24.91 by 2029.What will be the MAGIC price in 2030? MAGIC price is expected to reach $28.5327 by 2030.What will be the MAGIC price in 2040? MAGIC price is expected to reach $68 by 2040.What will be the MAGIC price in 2050? MAGIC price is expected to reach $150 by 2050.Disclaimer: The views and opinions, as well as all the information shared in this price prediction, are published in good faith. Readers must do their research and due diligence. Any action taken by the reader is strictly at their own risk. Coin Edition and its affiliates will not be held liable for any direct or indirect damage or loss.The post MAGIC Price Prediction 2023-2030: Will MAGIC Price Hit $4 Soon? appeared first on Coin Edition.See original on CoinEdition More

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    in Cryptocurrency

    DOGE Price Could Correct Soon Despite High Social Sentiment

    Dogecoin (DOGE) is one of the cryptocurrencies in the red for today. CoinMarketCap indicates that the meme coin is trading hands at $0.08621 after a 4.27% drop in price over the last day. DOGE was able to reach a low of $0.08471 and a high of $0.09126 over the same time period.
    Dogecoin / Tether US 1D (Source: TradingView)DOGE also weakened against the two biggest cryptos in the market, Bitcoin (BTC) and Ethereum (ETH), by about 0.08% and 1.99% respectively over the last 24 hours. The meme coin’s 24-hour trading volume is in the green zone and stands at $778,278,811 after a more than 12% increase since yesterday.With its market cap of $11,439,134,404, DOGE is currently ranked as the 10th biggest crypto in terms of market capitalization. This places it right behind Polygon (MATIC) in 9th position and in front of Solana (SOL) which is ranked 11th.A crypto enthusiast took to Twitter on February 16 to share his thoughts on DOGE. According to the post, social sentiment around DOGE has not been this positive since October of 2022 when DOGE pumped 160%.
    DOGE social volume (Source: Santiment)The market intelligence platform Santiment then replied to this by stating that this pattern of social volume and positive sentiment toward DOGE perfectly illustrates how euphoria creates price tops.Santiment then continued to explain that historically, hype like this around DOGE led to market corrections. This is certainly something that traders should keep in mind when it comes to being caught up in the excitement around the meme coin.Disclaimer: The views and opinions, as well as all the information shared in this price analysis, are published in good faith. Readers must do their own research and due diligence. Any action taken by the reader is strictly at their own risk. Coin Edition and its affiliates will not be held liable for any direct or indirect damage or loss.The post DOGE Price Could Correct Soon Despite High Social Sentiment appeared first on Coin Edition.See original on CoinEdition More

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    in Economy

    BlackRock, Standard Chartered to join talks at new debt roundtable on Friday

    WASHINGTON/LONDON (Reuters) -U.S.-based investment firm BlackRock (NYSE:BLK) said on Friday it would join a new sovereign debt roundtable set up to accelerate progress on stalled relief efforts for distressed countries with Britain’s Standard Chartered (OTC:SCBFF) also joining according to sources. The Global Sovereign Debt Roundtable, chaired by the International Monetary Fund, the World Bank and India – this year’s leader of the Group of 20 major economies – will hold its first virtual meeting on Friday, a gathering aimed at setting the agenda for an in-person meeting on Feb. 25 on the sidelines of a G20 finance leaders meeting in Bengaluru, India.”We welcome the Global Sovereign Debt Roundtable and look forward to engaging constructively in the dialogue alongside other key stakeholders,” a spokesperson for BlackRock told Reuters. Three people with knowledge of the matter said Standard Chartered would also join. A spokesperson for Standard Chartered declined to comment.Unlike the Common Framework platform for bilateral debt restructuring, the roundtable talks include public and private creditors as well as borrowing countries. Such setup aims at finding common ground on standards, principles and definitions for how to restructure debts of distressed countries, officials have said.Participants include officials from creditor countries China, India, Saudi Arabia, the United States and other wealthy Group of Seven democracies, as well as six borrowing countries – Ethiopia, Zambia, Ghana, Sri Lanka, Suriname and Ecuador.BURDEN SHARINGWorld Bank President David Malpass, who helped organize the roundtable, said he hoped bringing the private sector into the process earlier – and facilitating its dialogue with China and other big creditors – would help speed up debt relief.”To actually have debt relief that’s meaningful, there has to be a burden sharing among the various creditors,” Malpass told Reuters in an interview on Thursday.Including specific financial institutions in the roundtable and having them join China, India and other bilateral creditors that are not part of the Paris Club marked a big step forward, he said.Private sector creditors now hold a much bigger share of the debt owed by developing and emerging market economies than official sovereign creditors, but have been largely absent from the Common Framework process.The World Bank’s International Debt Report showed that the external debt of the poorest countries nearly tripled to $1 trillion in 2021 from a decade earlier, and 60% of those countries were in or at risk of debt distress. Low and middle-income countries owed 61% of their debt to private creditors.China – now the largest official creditor – has been holding back to see how other bilateral and private creditors participate in debt reductions, or haircuts. At the end of 2021, China was the largest bilateral lender to the poorest countries, accounting for 49% of their bilateral debt stock, up from 18% in 2010, according to World Bank data. “Private creditors are major players in many debt restructurings and need to share the responsibility for achieving a successful restructuring,” Malpass added. More