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Following a spell of uncertainty over Fed’s interest decision, the crypto markets reacted positively shortly after the decision was announced. The Fed hiked interest rate by 75 basis points, anticipating that the ongoing increases would be appropriate. The decision came in line with a widespread prediction of rise by 75 basis points. In this context, Bitcoin and Ethereum prices rose by 2.17% and 3.98% respectively in the last one hour.
FOMC Attentive Of Inflation Risks
The Federal Open Market Committee (FOMC) said recent indicators of spending and production have softened. However, the panel stated that job gains have been robust recently and the unemployment rate remained low. Also, the committee said inflation remained elevated, reflecting pandemic related supply and demand imbalances. In view of Russia’s war against Ukraine and its upward pressure on inflation, the committee said it is “highly attentive to inflation risks.”
“The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. In support of these goals, the Committee decided to raise the target range for the federal funds rate to 2-1/4 to 2-1/2 percent and anticipates that ongoing increases in the target range will be appropriate.”
Going forward, the FOMC said it would consider factors like public health, labor market conditions, inflation pressures and inflation expectations.The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge, it added.
Crypto Market Reacts Positively To FOMC Decision
Meanwhile, the cryptocurrency market saw a slight jump in prices, including a 4.27% increase in Cardano and 2.585 rise in XRP. However, it is still yet to be seen how the crypto space could react after Fed chair Jerome Powell’s statement. Michaël van de Poppe, a crypto enthusiast, commented that the current minor rally might not be sustainable. An interest rate hike by 75 basis points is bullish for the crypto market, he predicted.
The FOMC decision resulted in a major spike in Bitcoin price. As of writing, BTC is trading at $22,078, according to CoinMarketCap. Another interesting development is the dramatic rise in the price of AVAX following the Fed interest rate decision. Before the announcement, AVAX was trading at $21.10 and it immediately took a spike to $21.88. Currently, Avalanche (AVAX) is trading at $22.12, up 4.67% in one hour and 10.62% in the last 24 hours.
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