Bitcoin News

US FOMC Set To Announce Rate Hike “Pause”, Bitcoin To Rally

The US FOMC is expected to keep the target range for the federal funds rate at 5.25%-5.5%, the Wall Street estimates a Fed "pause".
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US FOMC Set To Announce Rate Hike “Pause”, Bitcoin To Rally

The U.S. Federal Reserve’s Federal Open Market Committee (FOMC) is set to announce its rate hike decision on Wednesday. The FOMC is expected to keep the target range for the federal funds rate at 5.25%-5.5%, which is a 22-year high.

Fed Chair Jerome Powell signaled that the committee will evaluate the impact of recent rate hikes as they reach the end of their rate-hiking campaign. While the inflation still remains above the U.S. Fed’s 2% target, the FOMC committee is set to announce a “pause” for the second time this year. However, the Fed can increase interest rates by another 25 bps at the end of the year if inflation rises.

The annual PCE rate, the Fed’s preferred inflation gauge, edged up to 3.3% in July from 3% in June. The job market has cooled, with the unemployment rate rising.

Wall Street giants estimated a “pause” in September, but rising oil prices threaten to push inflation higher once again. JPMorgan, Goldman Sachs, Morgan Stanley, Barclays, BNP, BMO, Bloomberg, Nomura, RBC, and Wells Fargo forecasted a pause. Whereas, Raymond James and Mizuho expect a 25 bps hike.

“We expect the Fed will keep rates unchanged at tomorrow’s FOMC meeting, while retaining a tightening bias. We think the 2023 median dot will continue to show one further hike this year, while there is a risk that the longer-run dot is revised higher.”

The CME FedWatch Tool shows a 99% probability of a pause at the next FOMC meeting on September 20. Meanwhile, the US dollar index (DXY) still remains higher above 105, risking BTC price to continue under pressure.

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Bitcoin Inches Toward $30000

BTC price jumped 1% in the past 24 hours, with the price currently trading at $27,144. The 24-hour low and high are $26,918 and $27,488, respectively. However, the price remains volatile ahead of the Fed’s monetary policy decision.

Bitcoin has climbed 5% in a week as traders expect a significant upside momentum after the FOMC. It will bring back the much-needed bullish sentiment amid better technical chart patterns.

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Varinder Singh

Varinder has over 10 years of experience and is known as a seasoned leader for his involvement in the fintech sector. With over 5 years dedicated to blockchain, crypto, and Web3 developments, he has experienced two Bitcoin halving events making him key opinion leader in the space. At CoinGape Media, Varinder leads the editorial decisions, spearheading the news team to cover latest updates, markets trends and developments within the crypto industry. The company was recognized as Best Crypto Media Company 2024 for high impact and quality reporting. Being a Master of Technology degree holder, analytics thinker, technology enthusiast, Varinder has shared his knowledge of disruptive technologies in over 5000+ news, articles, and papers.

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Why trust CoinGape: CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights to our readers. Our journalists and analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.
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