here we will cover some theories on what could happen after the feds meeting on 15th Dec 2021.
Recently a US CPI data report was published stating the inflation rate in US 39 years high at 6.8%. These numbers now have general public of USA worried, which can cause a decline in support of current US president. Because since past 18 months all the market were going up smoothly due to excessive money printing by US govt.
However that was beneficial for only 1 or 2% people who were already rich and kept getting richer.
However buying power of general public kept decreasing and prices of commodities are going up. Minimum wages are not keeping up with inflation rate, data shows minimum wages increase at 4.3% , whereas inflation is at 6.8%.
To keep the support of public and keeping them from revolting and protesting on streets, the inflations number needs to increase.
Basically that's what FOMC meeting is about. How to keep the numbers down, without breaking the economy.
Feds have two options now:
Stop the money printing completely and break the economy.
Keep printing money and loose the support of public.
Both are bad, however if they would have to choose they will choose the first option, but of course they can not completely shut down the money printer.
Here comes tapering, they will slow down the money printing process, while increasing interest rates. By how much percentage they will increase the interest rates, will have as much effect on the Markets.
For crypto currency Market, december is somewhat a volatile and uncertain month. Yes, mainly it depends on what feds will decide in the meeting.
However once things have settled in, gradually markets will again start climbing probably in January 2022.