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JUNE 1, 2023

HIGHEST BITCOIN MINING DIFFICULTY

The difficulty level for mining Bitcoin has reached an all-time high, increasing by 3.4%. This level, which changes every two weeks, measures how hard it is for miners to verify transactions on the network. A higher difficulty means that mining Bitcoin has become more competitive, making it less profitable for miners. Additionally, the network’s hashrate has also reached a record high, making it even more challenging for miners to make a profit.

DEBT CEILING DEAL UPDATE

The House has passed debt-limit legislation with a strong bipartisan majority of 314-117 votes. With the bill now heading to the Senate, its approval is widely expected, and if passed, the legislation will suspend the debt ceiling until January 1, 2025. In addition, Democrats have committed to cap federal spending until that specified timeframe. The agreement aims to keep the country’s finances stable for the rest of President Biden’s term. However, some conservative critics believe that the Speaker’s decision to make this deal could put his position at risk, and concerns have been raised about the agreement’s benefits.

RATES MAY STAY UNCHANGED

The Federal Reserve plans to maintain the current interest rates in June, but they may consider a hike in the future. Fed’s Governor Philip Jefferson, who is set to become Vice Chair, suggested that the Fed should skip a rate increase to assess data while keeping the possibility of tightening open. Furthermore, Fed’s Chairman Jerome Powell recently stated that the continued suspension of interest rate hikes is dependent on watching the data and the development of the economic outlook. This pause in hikes is justified by the belief that monetary policy operates with a delay, meaning that the effects of previous rate hikes have not yet fully settled on the economy and job market. The Fed has raised rates by 5% in the last 14 months to curb inflation and is now in a target range of 5% to 5.25%.

STRONG JOB GROWTH

According to a report from the payroll processing company ADP, the U.S. labor market exceeded expectations in May, with employers adding jobs at an impressive rate. Private sector employment showed a seasonally adjusted growth of 278,000 jobs in May, particularly in the leisure and hospitality sector, natural resources, and mining. However, some industries, like manufacturing and financial activities, saw declines, while wages slowed despite multiple job openings. Furthermore, small firms added nearly 240,000 jobs, while large companies lost over 100,000.

INTERNATIONAL NEWS

Inflation rates in the eurozone have dropped to a 15-month low as of May, creating an opportunity for the European Central Bank (ECB) to temporarily pause its aggressive interest rate increases. While the ECB is expected to raise rates by 0.25% at the June 15 policy meeting, the recent data might lead to a temporary halt during the summer. The slowdown in the inflation rate is attributed to lower energy prices, which spiked in March last year following Russia’s invasion of Ukraine but have reduced since then. However, food prices continue to rise sharply. Moreover, the core inflation rate, which excludes the volatile food and energy sectors, has declined to 5.3% from its high of 5.7% in March, further contributing to the overall decrease in inflation.

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