Investopedia Markets News (all except PF)

Jerome Powell's term as Fed Chair is due to end in May.
Credit: Chen Mengtong / China News Service/VCG via Getty Images

Key Takeaways

• The Federal Reserve held its key interest rate steady Wednesday as it weighed concerns of rising inflation against the slowing job market, which are pressuring both sides of the Fed's dual mandate.
• One Fed official cast a dissenting votes, hinting at the divisions among policymakers about whether inflation or unemployment poses the greater threat.
• It was the second-to-last meeting of the tenure of Fed Chair Jerome Powell, who has resisted President Donald Trump's demands for sharply lower interest rates.

The Federal Reserve voted to keep its key interest rate flat, as rising inflation prevented it from cutting rates and the slowing job market kept a rate hike off the table.

The Federal Open Market Committee voted Wednesday to keep the fed funds rate in a range of 3.5% to 3.75%, the same as it's been since December and as widely expected by financial market participants. One official voted to cut borrowing costs, but was outnumbered 11-1.

The central bank faces a dilemma because its dual mandate to keep inflation low and employment high has had setbacks in both directions. Normally, the Fed raises interest rates when it wants to make loans throughout the economy costlier and discourage spending, which helps push down inflation. When the job market stumbles, they usually do the opposite, cutting rates to promote easier money and boost hiring. The Iran war raises more questions about which direction to go.

"The implications of developments in the Middle East for the U.S. economy are uncertain," the FOMC said in a statement. "The Committee is attentive to the risks to both sides of its dual mandate."

Fed officials anticipate higher inflation in the coming year as a result of the war. In their set of quarterly projections released alongside the rate decision, Fed policymakers forecast a median core PCE inflation rate of 2.7% over the year in 2026, up from 2.5% the last time they made projections in December. However, they did not anticipate changes to the course of monetary policy in response, penciling in one quarter-point rate cut in 2026, the same as they did in December.

What This Means For The Economy

The Fed's lack of action was widely anticipated, so the Fed's economic projections and Fed Chair Jerome Powell's press conference will shed more light on how Fed officials are thinking about the impact of the Iran war and its effect on inflation.

Fed officials disagree about which is the more urgent threat at the moment. The Iran war has pushed up energy prices, threatening to stoke inflation in the coming months, while hiring has slowed to a crawl over the past year amid uncertainty about tariff policy, raising the risk of a serious increase in the unemployment rate. Economists say the war's effects on the economy will grow worse the longer it goes on, raising the chances of recession or stagflation.

Fed governor Stephen Miran, an appointee of Donald Trump, voted for rate cuts as he has at every meeting since he took office in September.

Other Fed governors have voiced more concern about the possibility of inflation flaring up again as tariffs and the oil shock from the Iran war push up prices for a wide range of consumer products. Some Fed-watchers have even begun to talk about the chances of the central bank hiking rates at some point this year.

The tensions at the Fed are not just about policy. The central bank is under political pressure from President Donald Trump, who has repeatedly demanded rate cuts. Although the Fed lowered interest rates by a quarter-point at each of its last three meetings last year, Trump has said they should be slashed much farther. Trump's hardball tactics have included insults against Powell and the attempted firing of Fed governor Lisa Cook. His administration has also launched an investigation of Powell over the an ongoing renovation project at the Fed's headquarters, which Powell and his allies say is an attempt at intimidation.

Trump's efforts have faced resistance from courts, which have so far blocked his attempt to fire Cook, and a different federal judge last week blocked the Justice Department probe of Powell, agreeing with Powell's assessment of the investigation's motives.

"There is abundant evidence that the subpoenas’ dominant (if not sole) purpose is to harass and pressure Powell either to yield to the President or to resign and make way for a Fed Chair who will," Judge James Boasberg wrote in an order quashing the grand jury subpoenas of the Federal Reserve Board. "On the other side of the scale, the Government has offered no evidence whatsoever that Powell committed any crime other than displeasing the President."

Trump's pressure campaign has raised concerns among economists and other experts about the independence of the Federal Reserve, which was set up by Congress to operate outside direct control of the White House, with officers serving long terms to ensure no president could appoint enough of them to take control of the bank. Research shows that central banks in countries with less-independent central banks tend to keep interest rates too low, to please the political leadership, thereby allowing inflation to run hotter.

In any case, Trump will soon have Fed leadership that is more inclined to see things his way. Powell's term expires in May, at which point Trump's handpicked Successor, Kevin Warsh, will take over, assuming he is approved by the Senate. That's not guaranteed, however, since at least one powerful Republican senator has vowed to oppose Warsh until the Trump administration drops its probe of Powell.

Wednesday was Powell's second-to-last meeting as chair, and he has not said if he will resign from his term as a rank-and-file Fed governor, or serve until January 2028 when his term expires.

UPDATE: This article has been updated after initial publication to include the latest forecasts from Fed officials for economic growth and interest rates.

Even with Wednesday's gains, Macy's shares have lost about a fifth of their value since the start of the year.
Credit: Eduardo MunozAlvarez / VIEWpress / Getty Images

Key Takeaways

• Macy's shares surged after the department store chain reported profits that topped analysts' estimates and unexpected growth in its same-store sales.
• The company gave a cautious outlook, citing macroeconomic and geopolitical uncertainty.

Macy's latest results have some investors piling back into the stock.

Shares of Macy's (M) were up over 4% in recent trading after the department store chain posted quarterly profits that exceeded analysts' projections and unexpected growth in its same-store sales.

The New York-based company reported adjusted earnings of $1.67 per share on revenue that slipped 1.7% year-over-year to $7.92 billion in the fourth quarter. Both figures topped analysts' estimates compiled by Visible Alpha. Macy's also reported its comparable sales rose 1.8% when analysts had called for a decline.

Why This Is Significant

Macy's gains suggest investors were pleased with its results, though the company gave a cautious outlook, citing macroeconomic and geopolitical uncertainty.

For fiscal 2026, Macy's sees adjusted EPS of $1.90 to $2.10, net sales of $21.4 billion to $21.65 billion, and comparable sales between a 0.5% decline and a 0.5% increase. All three metrics came in below estimates.

Macy's said it's taking a "prudent approach" to its outlook, given "macroeconomic and geopolitical factors that could influence discretionary spend." The company said its guidance assumes a larger impact from tariffs in the first half of the year than the second half, with the first quarter likely to be hardest hit.

Even with Wednesday's gains, Macy's shares have lost about a fifth of their value since the start of the year.

Gold prices have slid this month despite mounting geopolitical and economic uncertainty.
Credit: CFOTO / Future Publishing via Getty Images

Key Takeaways

• Strategists at State Street expect gold prices will continue to rise this year, boosted by geopolitical uncertainty, as well as expectations for a weaker dollar and lower interest rates.
• More than a third of fund managers surveyed by Bank of America earlier this month identified gold as the most crowded trade on Wall Street, which could limit upside for the precious metal.

Gold is one of the-best performing financial assets of the past year. Despite a recent cooling, some analysts say to expect more of the same. 

Spot gold prices, recently below the $5,000-per-ounce level they touched for the first time earlier this year, “could retest US$5,500-5,600/oz in March if the conflict in Iran escalates,” wrote State Street’s gold strategists on Tuesday. Geopolitics and the global macroeconomic environment, they argued, “remain supportive” of gold prices, and they see a 35% chance gold trades between $5,500 and $6,250 an ounce a year from now. Gold slid nearly 3% to about $4,880 an ounce on Wednesday morning. 

Gold’s performance since the U.S. and Israel began strikes on Iran late last month has defied some expectations. The precious metal, a safe haven asset that conventionally appreciates amid geopolitical uncertainty, is down 7% since the conflict began. Experts attribute that underperformance to a higher dollar, uncertainty about the conflict’s impact on interest rates, and a dearth of willing buyers after last year’s run-up. 

Why This Is Important

Gold is a traditional safe haven asset that becomes more attractive in times of heightened uncertainty and market stress. But the precious metal's underperformance since the beginning of the war in Iran illustrates the crosscurrents that can make even gold's response to conflict unpredictable.

State Street expects the forces holding gold back this month will be short-lived, and the trends that propelled it to record highs in 2025—and above $5,300 in January—will persist. The U.S. dollar fell more than 9% last year, its worst annual performance since 2017, and hit a 4-year low in January. While the greenback has recently caught an updraft from the war in Iran, the consensus on Wall Street, according to State Street, is that the dollar will fall another 3% this year, which should boost international demand for dollar-denominated gold. (Read more from Investopedia on gold-price dynamics here.)

Treasury yields could also be a tailwind for gold—if interest rates come down, as many investors hope. The Federal Reserve is expected to resume cutting interest rates later this year, lowering the opportunity cost of owning gold, or the income one foregoes buying gold, which pays no interest, instead of bonds that do. While soaring oil prices have recently caused investors to adjust their rate-cut expectations, they still see rates declining at some point this year. According to State Street, once the path for interest rates becomes clearer, it could fuel a feedback loop in which lower rates increase demand for gold funds, tightening supply in physical markets and driving prices higher. 

Investors have already piled into gold in 2026 broadly. U.S.-listed gold ETFs recorded inflows of $10.5 billion in the first two months of the year, up 67% from $6.3 billion last year. Despite healthy inflows, gold funds account for less than 1% of global ETF and mutual fund assets, which State Street suggests that “gold remains an under-owned portfolio asset." 

Not everyone on Wall Street agrees with that assessment. Thirty-five percent of fund managers surveyed by Bank of America this month identified “long gold” as the most crowded trade on Wall Street. March is the third straight month in which gold was the most common response. A net 38% of respondents called gold overpriced, up from 31% in February; these dynamics may also help explain the comparatively mild recent price action in gold. 

Coming into today's session, Williams-Sonoma shares had gained just 2% since the start of 2026.
Credit: Kevin Carter / Getty Images

Key Takeaways

• Williams-Sonoma shares jumped Wednesday after the San Francisco-based retailer reported better-than-expected earnings and boosted its dividend.
• The company's projections for profit and comparable brand revenue in 2026 also topped Wall Street forecasts.

Williams-Sonoma pleased investors Wednesday with better-than-expected earnings. Its outlook and dividend boost didn't hurt, either.

Shares of Williams-Sonoma (WSM) were up more than 5%, pacing gainers in the S&P 500 in late-morning trading on an otherwise down day for stocks. (Read Investopedia's real-time coverage of today's market action here.)

The San Francisco-based retailer reported earnings of $3.04 per share for its fiscal 2025 fourth quarter, topping the Visible Alpha analyst consensus of $2.89 per share. Comparable brand revenue increased 3.2% year-over-year, also topping expectations, although revenue of $2.36 billion came in just shy of estimates. The company also lifted its quarterly dividend by 15%.

Williams-Sonoma's fiscal 2026 projections for revenue and comparable brand revenue topped consensus.

"As we look forward to 2026 and beyond, we are confident in our competitive advantages that have allowed us to take market share, and our focus is on widening that advantage,” CEO Laura Alber said.

Share of Williams-Sonoma were up just 2% in 2026 through the close of trading on Tuesday.

Even with Wednesday's gains, Lululemon stock is down more than 20% for the year so far.
Credit: Isabella Falsetti / Bloomberg / Getty Images

Key Takeaways

• Lululemon executives said Tuesday that the company plans to sell more of its clothes at full price in fiscal 2026.
• The athleisure brand's fourth-quarter results beat estimates, sending the stock higher Wednesday morning.

Lululemon says it's looking to sell more clothes at full price this year, as it works to shore up declining margins. Could its plans help inject some fresh enthusiasm into the stock?

The athletic apparel maker's shares were up 3% in recent trading, a day after the company posted earnings that topped analysts' estimates, and laid out more details on its plans to revamp the business, including relying less on discounts.

Lululemon Athletica stock (LULU) has been pressured for much of the last year amid worries about higher tariffs, a shakeup in its leadership, dispute with its founder, and disappointing sales growth executives have credited to a "newness" problem.

Lululemon interim co-CEO and CFO Meghan Frank said during the company's earnings call Tuesday that its margins were hampered in the quarter by discounts and tariffs, according to a transcript from AlphaSense. However, Co-CEO André Maestrini said Lululemon is already seeing better full-price sales growth this month than it did in the fourth quarter, and expects it could continue to improve this year.

Why This Matters to Investors

Lululemon's latest moves could lift sentiment around the stock, though many investors may be waiting for more certainty around the company's leadership. Lululemon has yet to announce a new permanent CEO following Calvin McDonald's departure at the end of January.

Lululemon founder Chip Wilson has criticized several of Lululemon's recent decisions, including the lack of a succession plan for McDonald. Wilson on Wednesday called its appointment of new board member Chip Bergh "underwhelming," and said the company's lackluster outlook shows it still needs significant changes to its board and strategy to return to consistent sales growth in the U.S.

Lululemon reported fourth-quarter earnings per share of $5.01 on a 1% year-over-year rise in revenue to $3.64 billion. Both figures beat analysts' estimates compiled by Visible Alpha. However, the athleisure brand's outlook was less impressive.

Lululemon said it expects first-quarter EPS of $1.63 to $1.68 on $2.4 billion to $2.43 billion in sales, with full-year EPS of $12.10 to $12.30 on revenue of $11.35 billion to $11.5 billion. All four ranges came in largely below what analysts were looking for.

Even with Wednesday's gains, Lululemon stock is down more than 20% for the year so far.

News of the day for March 18, 2026

Major stock indexes have gained ground to start the week after posting losses for three consecutive weeks.
Credit: Michael Nagle / Bloomberg / Getty Images

Stock futures are slightly higher ahead of the release of inflation data and a Federal Reserve decision on interest rates; the Fed is widely expected to hold its key rate steady, but market participants will be focused on Chair Jerome Powell's comments about how the war is affecting the outlook for the economy and interest rates; crude oil futures are down slightly as investors monitor developments in the Middle East that could affect supply; Micron is scheduled to report earnings after the closing bell as shares of the memory chip maker trade at record highs; and the Producer Price Index for February is due out this morning, giving investors a look at where wholesale inflation stood before the Iran war started. Here's what you need to know today.

Stock Futures Rise After Two Straight Days of Gains

Stock futures are pointing higher Wednesday as the market looks to extend an early-week rally after major indexes posted losses for three consecutive weeks. Futures tied to the Dow Jones Industrial Average and the S&P 500 were up 0.3% recently, while Nasdaq futures added 0.4%. Market participants are awaiting inflation data this morning and the Fed's rate announcement this afternoon (more on that below). Crude oil prices were down 1% recently as investors monitor developments in the Middle East (see more below), while gold futures fell 1.5% to $4,930 an ounce. Bitcoin is trading around $73,000 after hitting its highest point in over a month around $76,000 earlier this week. The yield on the 10-year Treasury note, which affects interest rates on a range of consumer loans, ticked lower to 4.19%.

Fed Rate Decision, Powell Press Conference on Deck

The Federal Reserve's two-day meeting on interest rates concludes today, with Fed Chair Jerome Powell scheduled to give a press conference following the decision, which is scheduled to be announced at 2:00 p.m. ET. While the Fed is widely expected to hold rates steady for a second straight meeting after cutting rates three times to end 2025, investors will be interested in Powell's thoughts on the economy and what it could mean for the Fed's decisions in the months to come. An extended war in Iran could keep fuel prices elevated and stoke inflation elsewhere in the economy, leaving some experts to wonder if the Fed could actually lift rates later this year rather than continue to lower them as many had previously assumed.

Oil Prices Slip as Investors Monitor Middle East News

Crude oil prices are pulling back Wednesday as investors assess the latest developments in the Middle East. Late Tuesday, Iraq reached an agreement to reroute its oil shipments, potentially relieving some pressure on the global oil market that has been gripped by fears over an extended disruption if the Strait of Hormuz remains largely closed. Iraq will send its oil through a pipeline in the Kurdistan region, to a Mediterranean port city in Turkey, per Bloomberg. Israel also announced Wednesday that another Iranian official, Intelligence Minister Esmail Khatib, has been killed in its latest round of strikes. West Texas Intermediate futures, the U.S. crude oil benchmark, were down 1% at $95.30 per barrel recently, after falling as low as $92 overnight.

Micron Set to Report Earnings With Stock at Record High

Micron Technology (MU) is set to release quarterly results after the closing bell Wednesday, with the memory chip maker expected to report that revenue more than doubled year-over-year to a record $19.27 billion. The memory industry is in the midst of a component shortage as tech giants have bought up the hardware for use in AI data centers, allowing Micron and its few rivals to raise prices to record highs as they also look to increase production. Analysts have said that the shortage could last through next year and even into 2028 as the chipmakers work to meet demand. Micron shares were up 1% in recent premarket trading after gaining more than 4% Tuesday to close at a record high.

Wholesale Inflation Data Due This Morning

The Producer Price Index (PPI) for February, due to be released at 8:30 a.m. ET, will give investors a look at where wholesale inflation stood before the onset of the Iran war. The report, which measures inflation before products and services are sold to consumers, is expected to show that prices rose by 0.3% in February, down from a higher-than-expected 0.5% bump in January, according to a survey of economists by The Wall Street Journal and Dow Jones Newswires. Experts have said that the inflation outlook for the rest of the year will depend on how long the Iran war lasts, as elevated fuel prices could drive price increases across the economy.

Accenture shares have lost roughly a quarter of their value since the start of the year
Credit: Joan Cros / NurPhoto / Getty Images

Key Takeaways

• Accenture is slated to report earnings before the market opens Thursday, with the stock seen potentially testing six-year lows after the report.
• The IT and consulting firm is expected report rising revenue and profits, though its stock has had a tough start to the year amid broader uncertainty around federal spending and the impact of AI.

Accenture is set to report earnings Thursday morning, with traders anticipating the IT and consulting firm's stock could hit its lowest point in nearly six years following the report.

Options pricing suggests traders see Accenture (ACN) stock swinging up to 7% in either direction by the end of the week. A move of that size from Tuesday's close could drag the stock down to $185, its lowest level since May 2020. The high end of that range would push it up to about $213, recovering some of the stock's recent losses.

Shares of Accenture have lost roughly a quarter of their value since the start of this year, as the company contends with uncertainty around the impact of AI and tighter spending by the U.S. federal government, a major client.

Why This Matters to Investors

Accenture has been pressured in recent months by worries about AI and the Trump administration's efforts to cut spending, impacting the firm's government contracts.

Goldman Sachs analysts, who have a "buy" rating and $330 price target for the stock, wrote earlier this month that Accenture could lift its full-year sales outlook, which "should be enough to stabilize the stock at current levels given the undemanding setup."

Morgan Stanley analysts were less bullish, recently cutting their price target to $240 from $320, pointing to weak sentiment and a more muted demand environment.

Analysts surveyed by Visible Alpha expect Accenture's revenue grew 7% year-over-year in its fiscal second quarter to $17.87 billion. Adjusted earnings per share are projected to have risen 2 cents to $2.84.

Wall Street analysts are divided on Accenture's stock, but lean more bullish than bearish. The nine analysts with current ratings tracked by Visible Alpha are split between five "buy" and four neutral ratings. Their mean price target just below $263 would suggest nearly 33% upside from Tuesday's close.

Disney's new CEO Josh D'Amaro previously led the company's Experiences division
Credit: David Paul Morris / Bloomberg / Getty Images

Key Takeaways

• The Walt Disney Company's new CEO Josh D'Amaro took over the top job today after being appointed last month.
• The new CEO said he plans to grow Disney's streaming services and its Experiences segment in his first comments to shareholders.
• D'Amaro succeeds longtime chief Bob Iger, and previously led Disney's Experiences division, the media giant's most profitable segment.

Will Disney’s new CEO be able to win over investors' confidence?

Josh D’Amaro took over the top job at The Walt Disney Company (DIS) today from longtime chief Bob Iger. In his first public remarks as CEO during the company's annual shareholder meeting, D'Amaro told investors he views Disney+ as the "digital centerpiece" of the media giant's business and looks to boost growth in its streaming operations, along with its Experiences segment.

The appointment of D'Amaro, who previously led Disney's Experiences segment, has raised some speculation Disney could focus more on the cruise ship and theme park division in the years to come. The Experiences segment is the company's most profitable, accounting for close to 40% of its revenue and nearly 60% of its operating income in fiscal 2025.

However, worries around a decline in international visitors to Disney's parks in the U.S. and rising travel costs as the Iran war raises fuel prices have added to recent pressures on the stock, which has had a tough start to the year.

D'Amaro's leadership could also help address investor concerns around efforts to make Disney's streaming services—Disney+, Hulu, and ESPN—more consistently profitable. Iger said Disney overspent on the services as Disney adapted to the long-term decline in cable TV subscribers that hurt some of its revenue streams such as ESPN.

Why This Matters to Investors

The change in leadership and new initiatives under D'Amaro could help boost enthusiasm from investors who had been waiting years for more certainty around Disney's succession planning.

Disney announced D'Amaro's appointment a day after its earnings report last month, and has made other executive changes in the weeks since, including a realignment of its entertainment division.

Iger told investors during last month's earnings call that whoever replaces him would be leading a company that is better organized and positioned than it was when he returned to Disney in 2022, after serving as Disney's CEO from 2005 to 2020.

Wall Street analysts are overwhelmingly bullish on the company's stock. All six analysts with current ratings tracked by Visible Alpha have recommended buying Disney. Their average price target around $138 would suggest analysts see a return to what would be the stock's highest levels in four years.

Disney shares were down less than 1% in recent trading, and have lost about 12% of their value in 2026 so far, leaving them nearly flat over the past 12 months.

UPDATE—This article has been updated with the latest share price information and comments from D'Amaro at Wednesday's shareholder meeting.

Under the lead of Secretary Linda McMahon, the Department of Education has stopped monitoring student loan servicers.
Credit: Demetrius Freeman/The Washington Post via Getty Images

KEY TAKEAWAYS

• The Department of Education stopped monitoring loan servicer performance after cutting almost half its staff last year.
• Even while they were being monitored, many loan servicers had failed to meet the Department of Education's standards.
• It is important that loan servicers have accurate information and provide high-quality customer service, especially as upcoming changes will significantly impact federal student loan repayment and forgiveness programs.

The Department of Education is not monitoring the performance of its federal student loan servicers, a government watchdog organization recently reported.

To help manage the current $1.7 trillion student loan portfolio and the 42.8 million borrowers, the Department of Education contracts five loan servicers. The servicers generally handle the billing and assist borrowers with repayment plans and loan consolidations.

Why This Matters

Federal student loan policy is confusing, as repayment can differ significantly from that of other loan types. If borrowers receive inaccurate information from their loan servicer, such as their payment amounts, available repayment plans, or options to pause payments, it could lead to missed payments and financial difficulties.

Previously, the department would monitor servicers to ensure they used accurate data and that their calls with borrowers were helpful and professional, among other requirements. The Department of Education would enforce financial penalties against servicers whose performance did not meet its standards.

However, under an Executive Order from February 2025 ordering all federal departments to reduce their workforce, the Department of Education cut staff responsible for servicer monitoring by 46%. Since then, the department has not monitored servicers' calls to borrowers and has waived financial penalties, the U.S. Government Accountability Office said.

"Servicers may have less incentive to maintain accuracy and call quality," the GAO report said. "If servicers’ records are inaccurate, borrowers could, for instance, be placed in the wrong loan repayment status, billed for incorrect amounts, or not have a refund processed in time."

The Department's office responsible for monitoring servicers said in September that it would resume oversight using new, more efficient methods. As of December, the office had not implemented these methods to monitor accuracy and calls, GAO said.

The Department of Education did not respond to questions about whether it has resumed monitoring loan servicers.

Why Loan Servicer Monitoring Is Essential Now More Than Ever

While the FSA still monitored loan servicers, all five met the call quality standard. However, observations found that four out of five servicers did not meet the accuracy standard, and two had been financially penalized for failing to meet this metric.

"By discontinuing its oversight of servicer accuracy, FSA limits its ability to identify and remedy systemic servicing issues," the report said. "FSA previously used the results of assessments of servicer accuracy to identify systemic deficiencies and put servicers on corrective action plans to address them."

Ensuring student loan servicers provide borrowers with accurate and up-to-date information is essential, as several significant legislative changes are expected in 2026, GAO said.

Last year, many loan servicers struggled to keep up with rapidly changing repayment plans and policy decisions. By the end of February, servicers had a backlog of more than 575,000 applications requesting to transfer into an income-driven repayment plan. Many federal student loan borrowers also had trouble keeping up with the changes, and said it impacted their ability to repay their loans.

This year, a new income-driven repayment plan, the Repayment Assistance Plan, is expected to open in July. This plan will use a completely different method to calculate monthly payments and change how interest accrues. In addition, the Saving for a Valuable Education repayment plan was recently ruled illegal, and its more than 7 million borrowers will soon need to move to another repayment plan.

The bear and bull cases for the world's largest cryptocurrency set a wide range of possible outcomes.

Bitcoin has outperformed stocks and gold since the Iran war started late last month.
Credit: Getty Images

Key Takeaways

• Bitcoin's recent rise to around the $75,000 level hasn't fully convinced digital asset experts that the cryptocurrency has shaken off its rut.
• Citi's research team cut its base-case price target on bitcoin to $112,000, with its bull and bear cases implying possible upside of about 120% and downside of 25%.

Bitcoin's new nickname might be "Steady Eddie."

The world's largest cryptocurrency appears to be a slow-grind asset now, though its roughly 10% climb since the start of the Iran war, outpacing gold and the S&P 500, is starting to be appreciated by investors eyeing its performance amid geopolitical tensions in the Middle East. The price of bitcoin briefly touched $76,000 Monday evening, and was trading at $74,500 late Tuesday ahead of the Federal Reserve's interest-rate decision—traders largely expect no change—tomorrow afternoon.

Digital asset experts aren't entirely convinced that bitcoin's gradual ascent will last. One bank cut its year-end price target on the coin on Monday, citing molasses-like legislative progress that the firm suspects is holding back investor adoption. Between the closing window for crypto's catalytic Clarity Act—the key piece of crypto legislation that would set a framework for evaluating what tokens are securities, and which are commodities—to pass, and the general macroeconomic uncertainty, the prospects for risk assets remain dubious, according to analysts.

Important to Note

Institutional adoption of cryptocurrency appears to have its pros and cons. The positive: asset managers say that well-heeled investors have so-called "diamond hands," holding onto positions in risky assets even during times of volatility. The negative: bitcoin's moves are a lot less impressive these days than they were before.

Citi Research cut its price target on bitcoin on Monday to $112,000 from $143,000 previously, citing "slow legislative progress" in the Clarity Act. A regulatory advance would "unlock" investor demand and drive flows to ETFs, according to Citi research strategist Alex Saunders, but "paradoxically" weak coin prices would "increase the likelihood of compromise from the crypto industry."

"We think the window of opportunity is narrowing and would like to see some draft language from the Senate in April for there still to be a chance of passage," he said in the research report. "Bitcoin is likely to range-trade anticipating legislative news flow with ~$70k an important level representing the pre-US election price."

The firm's bull case for bitcoin, predicated on greater investor demand, and its bear case, based on recessionary factors at the macro level, set a wide range of possible outcomes—the coin could rise to $165,000, or sink to $56,000, implying upside of 120% and downside of about 25% from recent prices.

There's good news: Consistent exchange outflows would suggest that crypto buyers aren't selling into the rally, and ETF flows, in their third consecutive week of 'money in' rather than 'money out', bodes well for bitcoin, according to on-chain analytics firm Nansen. A "key variable," according to Nansen research analyst Nicolai Søndergaard, is the Fed decision expected tomorrow—if the expectation of a "neutral-to-dovish hold" is met, prices could go higher, but "we would expect some profit-taking fairly quickly" if it signals a more "hawkish" tone.

A more-bullish stance would require bitcoin to maintain these levels with strong trading volumes for a few days, Jake Kennis, a fellow Nansen research analyst, said in response to Investopedia's queries.

"It is testing $75k on relatively thin leverage, but to turn more bullish, I'd want to see new capital entering the market (open interest and volumes climbing) while price holds or pushes higher. Right now, it's too early to prove this rally can attract fresh positioning," he said.