Bitcoin (BTC) e Ethereum (ETH) are experiencing high volatility as the Federal Reserve decided to yet again raise the country’s interest rate by 0.75%, reaching a range between 3% and 3.25%.
Right after the Federal Reserve announcement, cryptocurrencies took another hit. However, this time the digital assets look like they were able to withstand the storm, and are not trading around the same price as before the Fed policy announcement.
Despite the United States Federal Reserve stating that its recent interest-raising policies are beginning to show results – the American government branch revealed that it might continue to increase interests if the country sees a need to continue to fight inflation.
“Recent indicators point to modest growth in spending and production,” The Fed said during the Federal Open Market Committee (FOMC). “Job gains have been robust in recent months, and the unemployment rate has remained low.”
Earlier today, BTC was trading at US$19.580, a 3.24% increase since the last day. Meanwhile, Ethereum saw a rise of nearly 6%, going from US$1.266 to US$1.343 in that same timeframe.
Despite that – Bitcoin has lost over 12% of its value in the last 15 days – a good part of that loss is attributed to the Fed policies that started in August.
The market has recently entered a state of tension as a result of American economic indicators. Now, investors are watching with bated breath to see what the next steps of the monetary authority will be.
In the statement, the monetary authority predicted that further tax adjustments will be implemented.
The Fed remains vigilant to inflationary risks and committed to bringing inflation rates down to the 2% target.
Chair of the Federal Reserve, Jerome Powell gave a press conference following the new interest rate decision.
Powell stated that his “main message has not changed at all”, regarding the interest hikes – “”The FOMC is strongly resolved to bring inflation down to 2% and we will keep at it until the job is done.”
The federal funds rate is predicted to reach 4.4% by the end of the year – signaling that the Federal Reserve will continue to raise interest rates at the next FOMC meeting.
The Federal Reserve does not foresee any rate reduction until 2024, putting a damper on the prospect of improved financial conditions anytime soon.
“Today, we’ve just moved probably into the very, the very lowest level of what might be restrictive,” Powell said.