NewsletterBreaking: FED Hikes Interest Rates By 25 BPS, Signals Pivoting Ahead
In what appears as a general market expectation, the United States Federal Reserve has hiked its interest rate by 25 Basis Points (B.P) in what appears to be a sustained effort to combat inflation that is yet to abate to the desired range. With yet another relatively mild interest rate hike, the US Fed Reserve has maintained its dovish tone, signaling the interest rate hikes may be tapered in the near future.
The Federal Reserve Chairman said the decision to hike interest rate by 25 BPS by the Federal Open Market Committee (FOMC) was a unanimous one, a show of unity in the fight to take the US economy back to its desired level.
Market experts have been projecting a slowdown in rate hike considering the recent turmoil the US financial ecosystem has faced with about 4 banks collapsing in recent times.
The Fed’s rate hike is an indication that the Feds prioritize the inflation fight and its impact on the economy. This rate hike is considered one of the most important ones ahead of the next major economic data releases, that is the CPI data later this month. Should the inflationary growth exceed the 5% that was reported for March, we can expect the pivot to be suspended in the near term.
Interest Rate Hike: Market Reaction
In the minutes after the release of the interest rate hike, the broader market has started reaction While Bitcoin (BTC) has printed a marginal loss of 1.28%, the milder than expected volatility indicates a major rebound from its earlier slips is possibly underway. Ethereum (ETH) is holding down the fort with its visible 0.64% uptick atop a $1,881.94 spot price.
The digital currency ecosystem is trading in antagonism to the mainstream financial market in which the S&P 500 Index is up by 0.21% to 4,128.15. The tech heavy Nasdaq Composite has also inked a 0.48% growth to 12,138.28 while the Dow Jones Industrial Average has added a negligible 2 points.
The encompassing growth in the top market indices is an indication that the rate hike is in line with the broader market expectation, opening investors to perfecting their approaches to the market over the next couple of weeks
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