#inflation-cpi

#inflation-cpi

A new research paper published by a trio of Federal Reserve economists suggests that the prediction market platform is a useful method for measuring macroeconomic expectations - and it may even be better than some traditional methods. "Our results suggest that Kalshi markets provide a high-frequency, continuously updated, distributionally rich benchmark that is valuable to both researchers and policymakers," the researchers wrote.

On Wednesday, the original cryptocurrency surpassed $97,000 for the first time in two months and is up more than 6% in the last week. The jump in Bitcoin came after Federal Reserve Chair Jerome Powell issued a remarkable statement that accused President Donald Trump's administration of directing a baseless criminal investigation at him in order to intimidate the agency. Meanwhile, the price of gold and other precious metals shot up as investors fled towards safe haven assets.

The Bank of England is expected to lower interest rates on Thursday after inflation fell to an eight-month low in November. The Monetary Policy Committee is tipped to cut the base rate from four per cent to 3.75 per cent - the fourth such rate cut this year, following reductions in February, May and August. This would bring borrowing costs down to the lowest rate since the beginning of February 2023.

The U.S. Federal Reserve's latest interest rate cut of a quarter percentage point lowered the benchmark federal funds rate to a range of 3.5%-3.75% in mid-December. This move continues to spark optimism among market participants, as valuations of most risk assets are directly tied to the risk-free rate, at least when it comes to modeling out a company's discounted future cash flows. Bond yields have also come down considerably in recent months (lower yields mean higher prices), so investors are winning across the board.