USD weakness
An increase in the key rate led to a decline in the greenback. The latter has fallen by 5% since the start of 2023. It also sank by 15% versus its main rivals, bouncing off the high of October 2022. As a reminder, in 2022, the greenback reached parity with the euro for the first time in 20 years. After that, it rose markedly against the euro. However, with more rate hikes, the US dollar lost ground. It was able to recover. However, its rally is usually short-lived.
Increase in interest cost on national debt
A hike in the Fed's interest rate led to a climb in payments on FICO bonds. The result was disastrous. It caused a wave of bank runs, for instance, Silicon Valley Bank (SVB). Nowadays, the American authorities spend more on interest payments on the national debt than on social projects. According to preliminary forecasts, in the near future, the cost of servicing the US national debt will exceed spending on defense, transportation, and education, as well as on health programs. In 2024, expenditures will reach $745 billion, analysts believe.
High and rising inequality
Monetary tightening also affects the well-being of the least protected segments of the population, causing a significant income gap between rich and poor. The Fed justifies its decisions aimed at combating inflation by the fact that low-income populations suffer more than others from rampant price growth. However, there are pitfalls that are difficult for the regulator to avoid. The central bank needs to take into account the decline in wages and labor demand. Ulrich Stefan, the chief investment strategist at Deutsche Bank, pointed out that apart from the deterioration of the labor market, an important gauge for the Fed, there was an increase in unemployment among African Americans in June. In this group, there was almost 90% of the nationwide rise in unemployment. In such a situation, the Fed has to maneuver between the ability to curb inflation and the need to maintain a balance in the labor market.
Economic inequality remains one of the most pressing issues in today's world. To measure the gap between the rich and the poor in each country, the Gini index is used. This coefficient reflects how income is distributed within a society: the closer the index is to 100, the greater the inequality. Let's explore which countries currently have the highest Gini index values
This year has been pivotal for Bitcoin, the world's leading cryptocurrency. One of the key milestones was the approval of Bitcoin spot ETFs by the US Securities and Exchange Commission. In April 2024, Bitcoin also experienced a halving event, which is typically seen as a positive development for the digital asset. This year, the cryptocurrency is up 57%, and analysts remain optimistic about its future. However, they highlight four key factors that could influence Bitcoin's trajectory, both for better and for worse
Analytical periodical US News and World Report has presented its ranking of the best countries in the world in terms of quality of life, based on a survey of nearly 17,000 people. The list considers factors such as economic and political stability, a strong labor market, income equality, family-friendliness, safety, the quality of education, and healthcare systems. Let's find out which countries made it to the top of this list.
