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The U.S. Federal Reserve has recently announced an interest rate hike of 50 basis-points. This comes after a string of interest rate hikes of 75 basis-points were officially published throughout the year. However, a lower interest rate was already anticipated by many because the Federal Reserve Chair, Jerome Powell, earlier announced the rate hikes would be lowered in December of this year. The announcement has been negatively received by the crypto market, at the time of writing.
Markets Go Down
On news of the Fed’s announcement, the largest crypto by market capitalization, Bitcoin, decreased to $17,872 from $18,310, whereas, Ethereum — the second-largest crypto fell from $1350 to $1305 in price.
Altcoins like XRP, Solana and Chainlink also recorded a slump in price within minutes of the announcement.
Out of the top 100 coins by market capitalization — Axie Infinity, Chilliz, Flow, and Quant were the most hit, falling by over 3% in the past hour.
Read More: Fed Hikes Rate By 50 BPS As Per Market Expectation, Stocks Go Down
Meanwhile, major equity markets plunged following the Fed’s announcement, with the tech-heavy Nasdaq off 1.5%, and the S&P 500 & Dow Jones Industrial Average (DJIA) off by 0.6% and 0.5%, respectively. Gold, which is more often than not regarded as a safe haven, sank by 0.6%.
Rate Hikes Thus Far
The Fed raised interest rates by 0.25% in March 2022, the first hike since 2018. In its March policy meeting, it predicted six further hikes, which have since proved true.
Read More: Crypto Expert Predicts Ethereum (ETH) Price; Time To Buy?
In May, the central bank continued its policy of economic tightening, by announcing the first 0.5% increase since 2000. The remaining five hikes June, July, September, and November were all 0.75%, until the downgrade of 0.5% which happened today.
Investors are nonetheless worried about the central bank’s approach to controlling price inflation as well as the possibility of a severe recession.
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