Latest news with #centralBankers
Yahoo
10 hours ago
- Business
- Yahoo
Europe's Time Is Now (for Stablecoins)
Trump has come into office with a wrecking ball – and his acts of unpredictability, both domestically and abroad, have only hampered the dollar's status as the choice reserve currency. In the crypto world, this only means one thing – USD-pegged stablecoins will wane in dominance, leaving a vacuum for other currencies to pounce. And of them, it might just be the rapidly growing EUR coins that muscle up the hardest. Let's take a step back. Since Trump's inauguration, the dollar has fallen to a three-year low against a basket of major currencies, declining by approximately 5% over roughly the last six months. A combination of whimsical trade policy, feckless fiscal bets, and, overall, international antagonism have beleaguered the U.S. market, damning its equities, raising its Treasury yields, and taking an axe to the dollar. The U.S.'s prominence as the strongest and most stable economy has been tested. And we've even seen an 'Anywhere, but the USA' trade come to light as a result. With the U.S. economy and markets so volatile, investors have – as usual – fled to safe-haven assets like gold to mitigate any losses. But surprisingly, the euro has also risen up the ranks: according to a recent report by Reuters, central bankers across the globe are now looking at gold, the renminbi, and the euro as choice reserve assets. The world is diversifying away from the dollar – and that'll be sure to reflect in DeFi. Of course, that being said, I'm not talking about a full-fledged overtake here. In the stablecoin world, USD is very much king. Tether dominates nearly 70% of the market, and we've even seen Circle make headlines for securing a $5.4 billion IPO. But as the dollar wanes – especially to the point it makes losses against emerging markets and the G10 – I just think the market will broaden out. USD monopolies might not be as strong. Currently, there are 12 prominent euro-pegged stablecoins and 56 USD counterparts – a huge difference. But as the euro makes up its losses and gains further strength, who's to say these coins won't compete? With enthusiastic fiscal policy, stronger defence spending, and, of course, the momentum of capital flow, the euro has climbed to near pivotal $1.20. And if Trump continues on his current path, I expect this will only climb further. It's not just a trend of de-dollarization to factor in, either. The E.U. has become increasingly open to crypto, this year cementing the final provisions of the MiCA framework – giving crypto issuers the ability to attain licences and establish themselves in the regulated European market. Tether is not compliant with MiCA, giving alternative coins – including EUR-pegged ones, such as EURC – an opportunity to strengthen their regional market share. By way of that, the E.U. has subsequently adopted a more favorable and supportive stance toward crypto issuers. OKX, Coinbase, and soon perhaps even Gemini are all crypto issuers and exchanges with or about to receive EU approval. Forget Trump's vows to make the U.S. the 'crypto capital of the planet.' The EU is fast catching up. Europe is no longer the anti-innovation, bureaucratic monster it once was. It has palmed off its past scepticism, opened its doors to digital assets, and beyond that, as per Christine Lagarde, is ambitious enough to be pushing for its 'global euro moment.' It is truly capitalizing on the misfortunes of Uncle Sam, and I see no plausible reason as to how this won't reflect in the stablecoin market. I understand the attitude toward stablecoins is still mixed. The Bank of International Settlements has recently cast them off as a 'financial stability risk.' Even so, the global market cap of the broader ecosystem recently peaked at over $250 billion. The size, popularity, and appeal of the market cannot be denied. And they're certainly more practical than tokenised currencies, as BIS' Project Agora is attempting to push forward. As such, I don't see the stablecoin market contracting any time soon. And as long as Trump continues his heavy-handed approach and Europe capitalises on the fallout, I can only see issuers veering closer and closer to EUR-based coins. Complete de-dollarisation is far from realistic, but as long as the euro remains on its upward trajectory, so will investments into and transactions via the continent and its currency. By 2028 – and by that, I mean the end of Trump's term – I predict we'll see more EUR-pegged stablecoins come to the surface, and so much so that they'll even threaten their American counterparts. Recession risks, bear market risks, and, overall, a lack of investor confidence have taken the dollar into the doldrums. Europe's time is now.
Yahoo
10 hours ago
- Business
- Yahoo
4 Key Signals Investors Are Watching for Bitcoin's Next Surge
Sophisticated investors look to macro factors to inform the timing of their buying. You don't need to focus on any specific macro indicator or factor. But even if you plan on investing for the long term, it can be helpful to know what they are. 10 stocks we like better than Bitcoin › Bitcoin (CRYPTO: BTC) thrives on easy cash the way a bonfire loves dry pine needles. Pile on the tinder and flames leap higher; douse the pile and the glow fades fast. Right now, a set of four macro gauges suggests that central bankers, specifically the Federal Reserve, could be taking steps to create conditions for a sharp run‑up in the crypto's price. Investors who track these dials before the crowd often catch Bitcoin's next lift while everyone else is still debating headlines. Think of the broad U.S. money supply (M2) as one of the many fuel tanks of the economy. When this particular tank is full, there's more cash available for everything from home loans to speculative assets like Bitcoin. When it is shrinking, households and businesses pull back, and risk assets struggle. Furthermore, as a rule of thumb, when money is easier to come by, investors tend to be more willing to take riskier bets, like in cryptocurrency. After shrinking for many months, M2 growth turned positive in early April. It's now roughly 1% above last year's level, according to the latest data from the Federal Reserve of St. Louis. That's not a huge jump, but history shows that the directional switch itself matters. Every major post‑2010 Bitcoin rally began only after M2 stopped contracting. So keep an eye on its trajectory. Bank reserves are the cash deposits commercial banks keep parked at the Fed. A high level of reserves means that banks can lend freely to each other and to their many customers without worrying about running short on funds, which keeps credit cheap and plentiful. Cheap credit is good news for assets that thrive on liquidity, like Bitcoin. Reserves have stayed above $3 trillion for most of 2025, well above the levels that regulators calculate as being comfortable. With that much cash sitting idle, banks have little reason to slam the brakes on lending, and extra credit tends to flow toward higher‑risk corners of the market. In other words, for as long as this situation lasts, it will be a tailwind for Bitcoin. The Fed has been shrinking its balance sheet. It has been selling U.S. Treasuries it bought during the pandemic stimulus, such that it is effectively pulling money out of the system. Fewer dollars in circulation normally tightens financial conditions and cools off risk appetite. On March 19, the Fed said it will reduce the speed of that runoff, cutting the monthly cap on Treasury reductions from $25 billion to $5 billion. Reducing the pace at which dollars are vacuumed up leaves more liquidity sloshing around, and if heavy government borrowing continues, outright balance sheet growth could return before 2026. Such a change would be akin to turning off the money vacuum, and then shortly thereafter turning on the money printer -- and Bitcoin loves it when the money printer is on. International money flows are also a key indicator to watch with Bitcoin, though they're a bit more complicated than the other mechanisms we've discussed so far. At the moment, large multinational companies can borrow dollars and change them into euros at roughly a 2% discount, trimming their interest bills overnight. When money is that cheap, some of the spare cash often leaks into riskier assets, and a similar setup in late 2023 helped fuel an 80% Bitcoin rally. Should the discount persist, it will be another tailwind for the coin. These four signals rarely flash bright green all at once. Savvy investors should therefore build their Bitcoin positions slowly while enthusiasm is scarce, so they're already on board when liquidity gushes. Dollar‑cost averaging (DCAing) tiny weekly buys, even when headlines scream about tariff wars or election drama, helps neutralize any timing risk, so it's probably the best way to proceed here. Before you buy stock in Bitcoin, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Bitcoin wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $687,731!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $945,846!* Now, it's worth noting Stock Advisor's total average return is 818% — a market-crushing outperformance compared to 175% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 23, 2025 Alex Carchidi has positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy. 4 Key Signals Investors Are Watching for Bitcoin's Next Surge was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
7 days ago
- Business
- Yahoo
Charting the Global Economy: Key Central Banks Hold on Rates
(Bloomberg) -- Central bankers in the US, UK and Japan held the line on interest rates this week as officials attempt to gauge the impact of tariffs, uncertainty about economic activity and war in the Middle East. Security Concerns Hit Some of the World's 'Most Livable Cities' One Architect's Quest to Save Mumbai's Heritage From Disappearing JFK AirTrain Cuts Fares 50% This Summer to Lure Riders Off Roads NYC Congestion Toll Cuts Manhattan Gridlock by 25%, RPA Reports Taser-Maker Axon Triggers a NIMBY Backlash in its Hometown While the median forecast from US Federal Reserve officials showed two interest-rate cuts by the end of the year, seven policymakers — up from four at the March meeting — indicated they see no reduction. The Bank of Japan unveiled a plan to ease the pace of its reductions to monthly bond purchases to ensure market stability while sticking to a path of normalization that includes the possibility of more rate hikes. The vote by Bank of England policymakers to hold rates steady was more divided than expected, leaving UK central bankers on course for a possible rate cut in August. Here are some of the charts that appeared on Bloomberg this week on the latest developments in the global economy, markets and geopolitics: World Japan's once-slumbering bond market has roared back to life with a burst of volatility that is echoing around the world. Major debt markets have moved in tandem with Japanese government bonds during the recent rout, with a spike in super-long yields in the Asian nation amplifying ructions fueled by global fears of widening fiscal deficits. Instead of processing copper in the US, many miners now turn abroad—where there's more than enough capacity—to transform the raw materials they pull from the ground. Economic pressure from China's army of smelters has been constant over the years and caused the US industry to downsize in the late 2000s and mid-2010s while demand for US copper dwindled. Now, demand is back but the US capacity isn't. In addition to US, UK and Japan policy decisions, officials in Pakistan, Chile, Armenia, Indonesia, Namibia, Georgia, Taiwan, Turkey and Botswana kept interest rates unchanged. Sweden lowered its key rate to a 2 1/2-year low and Norway surprised with a cut. The Swiss National Bank dropped its rate to zero and the Philippine central bank also lowered rates. Brazil boosted interest rates. US The Federal Open Market Committee voted unanimously to hold the benchmark federal funds rate in a range of 4.25%-4.5%, as they have since the beginning of the year. They also released new economic forecasts — their first since President Donald Trump unveiled a sweeping set of tariffs in April — showing they expect weaker growth, higher inflation and higher unemployment this year. New US residential construction declined in May to the slowest pace since the onset of the pandemic as an elevated inventory of homes for sale and high mortgage rates sapped the motivation to build. The pace of one-family home starts edged up but is still one of the slowest since 2023, while completions jumped. Sticker shock has yet to register for the residents of America's affluent suburbs and downtown condos, the target audience for luxury credit cards from JPMorgan Chase and American Express. The card companies are tapping into a new US economic reality: While the vast majority worries about money and is cutting back, the rich continue to shrug off recession concerns and spend freely. Europe In a decision that left rates on course for a potential quarter-point cut in August, six of the BOE's nine Monetary Policy Committee members voted to leave rates unchanged while three preferred an immediate quarter-point reduction. Economists had expected a 7-2 split. Investor confidence in Germany's economy improved more than anticipated as a forthcoming surge in public spending outweighs fears over looming US tariffs. UK home prices fell in April by most since 2021, government data show, as a tax increase drove some buyers out of the market. Asia The BOJ kept its benchmark policy rate at 0.5% and outlined a plan to cut monthly bond purchases from the next fiscal year to quarterly reductions of ¥200 billion ($1.34 billion) from the current ¥400 billion. The board's decision follows recent sharp moves in JGBs that rippled across global debt markets. China is testing the limits of what its consumer stimulus can accomplish by subsidizing purchases of select goods, fueling a shopping spree that boosted retail sales growth to the strongest in more than a year but threatening to overwhelm authorities even in the richest regions. Japan's exports fell for the first time in eight months as the US tariff campaign weighed on global trade, raising the risk of a technical recession after the economy contracted at the start of the year. The value of exports dropped 1.7% in May from a year earlier even as the export volume climbed 1.8%, suggesting exporters may be absorbing the tariff shock by cutting prices. Emerging Markets The United Nations nuclear watchdog said the location of Iran's near-bomb-grade stockpile of enriched uranium cannot currently be verified, as Israel's ongoing military assault is preventing inspectors from doing their work. Iran's 409 kilograms (902 pounds) of highly-enriched uranium — enough to produce 10 nuclear warheads — should theoretically be secured under an International Atomic Energy Agency seal at an underground facility at Isfahan. With the Trump administration's aggressive clampdown roiling migration patterns across the hemisphere, the top destination for outbound Cubans is no longer along Florida's shores. Instead of Miami they're flocking to Curitiba, in Brazil's farm country. --With assistance from Philip Aldrick, Irina Anghel, James Attwood, Claire Ballentine, Ruth Carson, Toru Fujioka, Annmarie Hordern, Sumio Ito, Masaki Kondo, Meg Lopes, Jacob Lorinc, Yoshiaki Nohara, Amara Omeokwe, Tom Rees, Andrew Rosati, Michael Sasso, Zoe Schneeweiss, Mark Schroers, Paige Smith, Jonathan Tirone, Fran Wang, Josh Xiao and Yvonne Yue Li. Luxury Counterfeiters Keep Outsmarting the Makers of $10,000 Handbags Ken Griffin on Trump, Harvard and Why Novice Investors Won't Beat the Pros Is Mark Cuban the Loudmouth Billionaire that Democrats Need for 2028? The US Has More Copper Than China But No Way to Refine All of It Can 'MAMUWT' Be to Musk What 'TACO' Is to Trump? ©2025 Bloomberg L.P. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Bloomberg
7 days ago
- Business
- Bloomberg
Charting the Global Economy: Key Central Banks Hold on Rates
Central bankers in the US, UK and Japan held the line on interest rates this week as officials attempt to gauge the impact of tariffs, uncertainty about economic activity and war in the Middle East. While the median forecast from US Federal Reserve officials showed two interest-rate cuts by the end of the year, seven policymakers — up from four at the March meeting — indicated they see no reduction.
CBC
22-05-2025
- Business
- CBC
Restoring stability is at forefront of G7 finance ministers' 3-day meeting in Alberta
Finance Minister François-Philippe Champagne says there's a sense of unity after emerging from a summit with his G7 counterparts. The group of finance ministers and central bankers gathered this week in Banff, Alta., ahead of the G7 leaders' summit set for next month in nearby Kananaskis.
