Fed Announces 25bps Rate Hike to 5%, Bitcoin Remains Flat

The Federal Reserve announced another small increase in the benchmark interest rate on Wednesday, bringing it between 5% and 5.25%.

Bitcoin price remained relatively flat upon the announcement, hovering between $28,000 and $28,500.

• The increase was largely in line with expectations, with the market priced at only an 11.8% chance that the FOMC will hold its rate steady, according to the report. CME FedWatch tool.
• The central bank has been raising interest rates since last year in an effort to quell consumer price inflation, which rose to a 40-year high of 9.1% last June.
• Financial commentators like BitMEX co-founder Arthur Hayes and expect That the Fed may stop raising interest rates and even start lowering them much sooner than expected after several bank failures before previous price high in May.
• Others like former Richmond Fed President Jeffrey Lacker Supposedly That the Fed will remain resolute in raising interest rates in the face of bank failures, rather than signaling to the markets that something is wrong.
• As of March 2023, inflation has fallen to 5% – although some believe this may not last due to the Federal Reserve’s efforts to protect the banking system, which has already pumped hundreds of billions of dollars into the economy.

• The Federal Reserve stated in a press release accompanying the announcement of the interest rate hike. “Tighter credit conditions for households and businesses are likely to affect economic activity, employment and inflation.”

• The central bank added that it would adjust its monetary policy position “if risks appear that may impede the achievement of the committee’s objectives.”