Following another Federal Open Markets Committee (FOMC) meeting on Wednesday, the Federal Reserve agreed to raise its benchmark interest rate by 25%.
Bitcoin did not react with its usual fervor to the news, continuing to trade slightly above $23,000.
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- The rate hike brings the Fed’s benchmark rate between 450 and 475 basis points – its highest level since late 2007. The 25-point raise was in line with market expectations, and milder than December’s 50-point hike.
- Bitcoin traded for roughly $23,000 prior to the announcement and saw little action in its aftermath. It briefly rose to $21,150, only to return to $23,050 at writing time.
- Bitcoin is up 37% since last month after rallying alongside tech stocks in response to bullish inflation data from December.
- With inflation on the way down, market participants began to suspect that the Fed may be prepared to “pivot” – slowing down or reversing its interest rate hikes, thus making investment easier.
- Indeed, the S&P 500 is up 6% since early January, while NASDAQ is up 11%. However, the Dow Jones Industrial Average fell by about 1% on the day
- Nevertheless, the Federal Reserve has made no indication that it plans to lower interest rates in the near future.
- A JP Morgan analyst called on the Fed to stop hiking entirely last month but still expects more interest rate increases until May, at which point the Fed may hold rates over 5% until the end of 2023.
The post How Bitcoin Reacted to January’s Highly Anticipated FOMC Meeting appeared first on CryptoPotato.
