Sentiment Is Lowest Ever Recorded

CEO and Co-Founder Ivan Zhang tackles the top market observations for the week. Follow us on Twitter and Instagram to stay up to date in real time.

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Observation 1

With the CPI coming in at 8.6% on Friday, hopes are dashed for a soft stance from the Fed. Naturally, risk assets have taken the news negatively and will have potential knock on effects in the next few weeks as investors remove funds from volatile investments.

TL;DR: With CPI increasing, it’s going to be a bumpy ride while investors change positions.

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Observation 2

This is not an isolated event however, the ECB increases its 2022 inflation forecast to from 5.1% to 6.8%. This is a major 1.7% increase, giving clear messaging on its intention to hike rates next month.

TL;DR: More rate hikes are coming. 

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Observation 3

A less talked about measure was the UMich consumer sentiment survey, which came in at lowest levels ever recorded. Over 46% of consumers attributed their negative views to inflation. Needless to say, consumers are feeling the crunch well before the Fed has had time to do meaningful tightening.

TL;DR: The Fed will need to act, which again, means more rate hikes are coming. 

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Observation 4

On more positive news, congress proposed a new digital asset bill that proposes clear delineation of authority between CTFC and SEC based on a digital asset’s level of decentralization, straightforward semi annual disclosures for digital assets that may fall under the SEC’s authority until full decentralization, clarifying statements regarding taxability of staking/mining income, and requires issuers to maintain asset values at 100% of outstanding stablecoins.

TL;DR: Regulations are coming to digital assets and the outlook is optimistic. 

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