Have you ever wondered what it's like when financial markets resemble a rollercoaster more than a stable path? This week has provided us with just such an experience. As investors struggled to navigate through the maze of data and forecasts, the Fear & Greed Index fell to a level of 20/100, indicating that extreme fear currently prevails. It's like a wild ride when emotions dominate over reason.
The week started off somewhat calmly, without key macroeconomic data, which may have provided a moment of respite for market participants. However, as is often the case, the calm before the storm can be deceptive. Investors anxiously awaited Wednesday's reports on inflation in the U.S., which were expected to serve as a litmus test for the future monetary policy of the Fed.
Wednesday became a moment of truth as inflation data was released. CPI m/m was 0.3%, in line with forecasts, while Core CPI stood at 0.2%. Although these figures did not trigger dramatic movements, they confirmed that inflation remains persistent. The market, like a detective from a crime novel, attempted to decipher what the Fed might be planning for its upcoming meeting.
Friday brought a culmination of tension related to the release of a series of macroeconomic data. On one hand, unemployment rose to 6.7%, which may suggest that the labor market is beginning to cool down. On the other hand, the U.S. GDP month-on-month was 0.0%, which was disappointing compared to the expected growth. All of this led investors to wonder whether the economy is on the brink of a slowdown.
In summary, this week, investors found themselves in a situation where fear and uncertainty dominate market decisions. The Fear & Greed Index confirms this, indicating extreme fear. The upcoming Fed meeting, scheduled for March 18, could be crucial for the further shaping of sentiment. In the meantime, for those who can't take a break even on weekends, cryptocurrencies offer continuous action – there's always something happening.
