The Federal Reserve has stated that it doesn’t plan to lower interest rates anytime soon as long as inflation stays high.
On Wednesday, the price of Bitcoin (BTC) surged after the Federal Reserve’s latest meeting of the Federal Open Markets Committee (FOMC). During the meeting, the Federal Reserve revealed that there would be no alterations to interest rates.
Bitcoin Reacts to Federal Reserve Decision on Interest Rates
The Federal Reserve’s decision to maintain its benchmark interest rate between 5.25% and 5.50% has tempered investors’ hopes for a more accommodative stance in the near future. Bitcoin, which was trading at $62,000 one hour before the announcement, saw a rapid increase in price to $64,600 following the revelation of the unchanged benchmark rate.
In its statement, the central bank highlighted the continued expansion of economic activity, low unemployment rates, and persistent inflation. The Fed emphasized that it would refrain from reducing the target range until it has greater confidence that inflation is moving sustainably towards the 2% target.
According to CME FedWatch, market expectations indicate that interest rates will likely remain unchanged at the next FOMC meeting in May. However, there is a 60% probability priced in for a 25 basis point reduction in June.
Bitcoin experienced a decline from $74,000 in the previous week as net flows into Bitcoin ETFs slowed significantly and turned negative over the past two days. These outflows followed a higher-than-expected inflation report in the U.S. on March 12, which revealed a 3.2% inflation rate for February.
Bitcoin / USD. Source: TradingView
Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
Join Cryptos Headlines Community
Follow Cryptos Headlines on Google News
Author
