The Fed Results, Bank of England, Bank of Turkey and Bitcoin

18 Mar 2021

The main event of this week is that the Fed meeting ended and it was more than expected. Monetary policy parameters are unchanged, as is the plan for changing rates until 2023. Economic forecasts were also revised upward as expected: in 2021, GDP will grow by 6.5% and by 3.3% in 2022, compared with previous estimates of 4.2% and 3.2%, respectively.

The meeting of the Bank of England should also close today: interest rates are unchanged (9 to 0 according to the distribution of votes), as well as the parameters of the quantitative easing program.

In this regard, the meeting of the Bank of Turkey is of greater interest. The sharp rise in inflation in the country has already forced the Central Bank to raise rates to an exorbitant 17% in the current reality. But today another increase is expected from the Bank of Turkey: from 0.5% to 1%. Moreover, most experts are inclined to the second option: the rate will increase from 17% to 18%. In this light, let us recall the likelihood of a carry trade in pairs with the Turkish lira. So its purchases look very promising in the medium term.

But back to the results of the Fed meeting. The monetary policy invariability and the reluctance to tighten it in the foreseeable future may well whet the appetite for risky assets. In this light, the news that Morgan Stanley will be the first major US bank to offer wealthy clients access to bitcoin funds. It may well create a wave of hype that will take Bitcoin to new all-time highs.