BlocksInform
Following another meeting of the Federal Open Markets Committee (FOMC) on Wednesday, the Federal Reserve agreed to increase its reference interest rate by 25 per cent.
Bitcoin has not responded with its usual fervor to information, continuing to trade marginally above $23,000.
- Rising rates raise the Fed's reference rate from 450 to 475 basis points – its highest level since the end of 2007. The 25-point increase met market expectations and was smaller than the 50-point increase in December.
- Bitcoin exchanged for about $23,000 before the announcement and saw little stock in its consequences. It was increased briefly to $21,150, returning to $23,050 at time of writing.
- Bitcoin is up 37% since last month after rallying alongside tech stocks in response to bullish inflation data from December.
- Inflation is falling, market players have begun to suspect that the Fed could be ready to "pivot" – slow or reverse its interest rate hikes, therefore facilitating investment.
- 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.
