🥵 The Fed’s sweating

Plus, everything you need to know for the week ahead | [Finimize]( Hi {NAME}. Here’s a look at what you need to know for the week ahead and the things you might have missed last week. In The Hot Seat The US central bank will make another big announcement this week, but the idea that it might soon start lowering interest rates appears to be going up in smoke. [In The Hot Seat] 🔍 The focus this week: Tough breaks Every three months, the Federal Reserve (the Fed) releases a bunch of projections – including the closely watched “dot plot”, which shows where members see interest rates moving. As recently as mid-March, those dots showed that officials still saw three rate cuts this year, despite an unexpected perk-up in inflation. But a lot has happened since then, and those projections are starting to look unrealistic. First, March’s inflation report came in hotter than expected across the board, with the annual pace of consumer price gains accelerating to 3.5% – its highest in six months. Then, a blowout labor market report showed the US economy adding 303,000 jobs in March – the 39th straight month of gains and 50% more than people expected. (And if that wasn’t blockbuster enough, the figures for the previous two months were also revised upward.) Finally, despite the US’s first-quarter growth figures missing expectations, they still showed the economy growing at a modest rate. So with [inflation]( drifting away from the Fed’s 2% target and the US economy and labor market clearly not in need of the boost that comes from lower borrowing costs, investors virtually all expect the central bank to hold rates unchanged at a two-decade high on Wednesday. In fact, they’re now betting on just one or two 0.25-percentage-point cuts for the entire year – far fewer than the six they were expecting four months ago. Even wilder, some traders have built up bets that the Fed might raise interest rates again, with options markets now suggesting a roughly one-in-five chance of a hike within the next 12 months – an unthinkable prospect a few months ago. Crypto's Going Mainstream. Here's What You Need To Know [Cryptocurrencies]( are increasingly becoming a part of mainstream finance and traditional portfolios. The digital assets have been easier to ignore in the past, though, so plenty of investors haven’t spent the time getting to grips with [the fundamentals of crypto investing](. But now that bitcoin spot ETFs have made it simpler to invest in the digital realm, it’s prime time to wrap your head around the complexities that come with crypto. So we’ve teamed up with [Grayscale]( – the world’s biggest crypto asset manager with over a decade of experience in related investment funds – to break down everything you need to know before you start investing in crypto. The guide will walk you through the ideal role crypto could play in your portfolio, the different ways you can invest in digital assets, and why you’d even want to take the plunge. So [check out our free guide with Grayscale](, and take the complicated out of crypto. [Read The Guide For Free]( 📅 On the calendar - Monday: Eurozone economic sentiment (April). - Tuesday: Japan industrial production and retail sales (March), Japan unemployment (March), eurozone economic growth (Q1), eurozone inflation (April), US consumer confidence (April), China PMIs (April). Earnings: Amazon, 3M, Coca-Cola, Eli Lilly, McDonald’s, Starbucks, AMD, Mondelez, PayPal. - Wednesday: Fed interest rate announcement, US job openings and labor turnover survey (March). Earnings: Qualcomm, Mastercard, Pfizer, Kraft Heinz, Estée Lauder. - Thursday: US trade balance (March). Earnings: Apple, Coinbase, Moderna, Amgen, Novo Nordisk, Block. - Friday: Eurozone unemployment (March), US labor market report (April). 👀 What you might’ve missed last week US - Bullish bets on the US dollar surged to a five-year high. - The world’s biggest economy grew by less than expected last quarter. Europe - Business activity in the eurozone jumped to an 11-month high. Asia - Chinese speculators have supercharged gold’s extraordinary rally. 🤔 Why it matters Investors entered the year betting the US dollar would fall, but they’ve been forced into a rethink by a resilient economy and some sticky inflation – both of which are discouraging the Fed from cutting interest rates. That’s had the greenback [sitting pretty](, gaining 4% against its major developed and emerging-market counterparts, according to a Bloomberg currency index. Traders are now predicting that the rally will continue: they’ve amassed huge dollar-bullish positions in the futures market, with their combined net positions currently the highest since 2019 – a stark contrast to the start of the year. The US economy grew by less than expected in the first quarter, while an important measure of underlying inflation jumped. Economic output increased at a 1.6% annualized pace last quarter from the one before – the slowest in almost two years and well below the 2.5% forecast. Meanwhile, the core personal consumption expenditures index – the price-pressure gauge that’s closely watched by the Fed – rose at a surprising clip, increasing by 3.7%, from 2% the quarter before. That marked the first acceleration in a year, which will likely compel the Fed to further delay any interest rate cuts. The eurozone appears to be emerging from its recent stagnation: its composite purchasing managers index (PMI) rose to an 11-month high of 51.4 in April, up from 50.3 a month earlier and considerably stronger than the 50.7 expected by analysts. That was the second month in a row that the closely watched gauge of business activity came in above the 50 mark that separates expansion from contraction. And that encouraging trend will likely reassure the European Central Bank that the bloc is still on track for a “soft landing”, rather than a recession. With dwindling expectations for any interest rate cuts this year, you might’ve expected [gold]( – which pays zero income – to fall from grace. But it’s gained instead, hitting a new all-time high this month. At the heart of this extraordinary surge is some relentless demand from China, where consumers, investors, and even the central bank have been flocking to the safe haven. Further fueling the rally are huge bets by Chinese speculators, with long gold positions surging to a record 324,857 contracts on the Shanghai Futures Exchange, equivalent to 325 metric tons. [Finimize]( Connect your brand with the next generation of investors Our one-million-strong international [financial community]( has some big plans. [Your brand could help them]( do just that: whether you provide information, tools, or tricks, you could help retail investors around the world make smarter decisions. So showcase your mojo in this very spot, and introduce yourself to over a million engaged investors – you might even help us change the world of finance for the better. [Get in touch today.]( [Get Your Name Out There]( ⏸ Want to turn off the Weekly Review? [Hit pause]( To stop receiving all Finimize emails (including the daily newsletter) [Unsubscribe]( [View in browser](