As the Fed tries to cope with rising inflation, the US interest rate has returned to pre-pandemic levels. Indeed, the market for crypto reacted positively to the news.
The Fed raises rates on 0.75% to fight inflation.
The central bank reported developments on Wednesday during federal open market Committee. After rising by 0.75%, US rates are now between 2.25% and 2.5%, the highest level since the start of the COVID-19 pandemic.
The Central Bank reported on developments on Wednesday at federal open market Committee. Following this 0.75% rise, U.S. rates are now between 2.25% and 2.5%, the highest level since the start of the COVID-19 pandemic.
The Fed’s decision came after the Bureau Labor, work Statistics United States It has announced that consumer prices hit a 40-year high 9.1% in June. This is despite efforts by the central bank to raise interest rates to stem the price hike in the coming months. According to the report of the bureau, the main reasons for the increase were the increase in prices for gasoline, housing and food.
To combat inflation, the Fed may try to reduce the money supply. This is achieved by raising interest rates, which makes credit more expensive. There were even speculations that the central bank might opt for a 100 basis point hike shortly after the release of June inflation data.
Bonus: The stablecoin bill will be delayed in September due to concerns from the Treasury Department.
crypto rises in response
The main cryptocurrency BTC won 2.5% in response to the US central bank’s statement about a further increase in the key rate by 75 basis points.
The price of bitcoin fluctuated immediately after several meetings FOMC during a year. Sometimes volatility is short-lived; in other cases, rate hikes have a long-term impact on cryptocurrencies and stock markets. Bitcoin has been highly correlated with stocks throughout the year, especially in response to the Fed’s policies. The S&P 500 gained 1.2% and the Nasdaq 100 gained 2.5% on the day.
From my side,Ethereum hit around $1,550, up 11.6% on the day. After the last rally, the capitalization of the global cryptocurrency market once again exceeded $1 trillion.
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