Cryptocurrency takes a hit as investors dump risk assets

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The S&P 500 dropped sharply this past week as investors priced in the Federal Reserve’s more aggressive approach to raising interest rates.

On Wednesday, the Federal Open Market Committee raised its fed funds target range by 0.75% to between 1.5% and 1.75%. The move marks the first time the Fed has raised interest rates by 0.75% in one meeting since 1994, and Fed Chair Jerome Powell said another 0.75% rate hike is on the table for the Fed’s July meeting, as well. In its updated economic projections, the Federal Reserve raised its outlook for 2022 personal consumption index inflation to 5.2%, up from 4.3% in March.

On Thursday, the Census Bureau reported U.S. housing starts dropped 14.4% in May, a sign rising mortgage rates are cooling the housing market. The Commerce Department reported Wednesday that U.S. retail sales unexpectedly dropped 0.3% in May, yet another sign of an economic slowdown.

Bitcoin cryptocurrency background. A bunch of golden bitcoin, Digital currency

Bitcoin prices briefly fell to new 52-week lows below $20,000 as investors continued to dump risk assets. On Tuesday, popular cryptocurrency exchange Coinbase announced it is laying off 18% of its full-time employees.

The yield on 10-year U.S. Treasury bonds finished the week at around 3.23% after reaching 3.483% on Tuesday, its highest level since 2011.

Checking out

Kroger reported a first-quarter earnings beat on Thursday but issued disappointing same-store sales guidance, sending its stock lower by more than 9% on the week.

Investors will get more quarterly earnings reports from Lennar on Tuesday and Rite Aid, BlackBerry and FedEx on Thursday.

At least 417 S&P 500 companies mentioned the word “inflation” in their first-quarter earnings calls, according to FactSet.

More: Fed issues steepest interest rate hike since 1994 in effort to battle inflation

More: IRS pushes standard mileage rate to 62.5 cents per mile for 6 months as gas prices soar

Economic numbers

In the week ahead, investors will get key economic updates on Wednesday and Thursday when Powell, the Fed chair, gives his twice-annual report to Congress on monetary policy. In addition, the Federal Reserve will publish the results of its annual stress test of major U.S. banks on Thursday.

Benzinga is a financial news and data company headquartered in Detroit.

This article originally appeared on Detroit Free Press: Cryptocurrency takes a hit as investors dump risk assets