Breaking: US Fed Hikes Interest Rate By 25 Bps; Bitcoin Price Surges
Crypto News: In line with the market expectation, the US Federal Reserve’s Federal Open Market Committee (FOMC) on Wednesday delivered a 25 bps rate hike decision, taking the rates to the highest level in over 22 years. This brings the current target rate to the 525-550 bps range. The Fed noted that job gains have been robust in recent months, and that the unemployment rate has remained low, whereas inflation remained elevated. Meanwhile, the Bitcoin price reacted with slight dip in its initial reaction to the news of the FOMC rate hike, before assuming gains.
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Outlook For Upcoming FOMC Meetings
In recent statements, the Fed officials have been warning of the possibility of two more rate hikes in the current year. This means there could likely be one more rate hike coming in 2023, after the rates already reaching the highest level since 2001. The FOMC reiterated that its target is to achieve maximum employment and limit inflation at the rate of 2 per cent over the longer run. Analysts predict that if the rate hike pause kicks in from the next FOMC meet, the January 2024 meeting could likely deliver the first rate cut.
“In support of these goals, the Committee decided to raise the target range for the federal funds rate to 5-1/4 to 5-1/2 percent. The Committee will continue to assess additional information and its implications for monetary policy.”
Bitcoin Price Maintains Sideways Action
Meanwhile, the Bitcoin Price (BTC) could potentially reach new highs in the current year as the crypto market is likely to become increasingly bullish over the Bitcoin halving around April 2024. In the lead up to the Fed meeting, the BTC price has barely fluctuated, remaining flat compared to 24 hours ago. It remains to be seen how the crypto market will react to this news as it was on a widely expected lines.
Also, US Fed Chair Jerome Powell is scheduled to deliver his much awaited comments on the FOMC’s position in a post meeting press conference.
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