The U.S. Federal Reserve on Wednesday announced the interest rate raise by 75 basis points. This is for the fourth consecutive meeting that the central bank announced aggressive rate hike. The Fed, however, hinted at a potential slower pace, going forward, in a potential hint at slowing rate hike in December 2022. The Fed statement read:
“The Committee decided to raise the target range for the federal funds rate to 3-3/4 to 4 percent. The Committee anticipates that ongoing increases in the target range will be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2 percent over time.”
Crypto Prices Turn Green As Bitcoin Skyrockets
Meanwhile, crypto prices turned bullish as Bitcoin (BTC) price skyrocketed following the FOMC decision. As of writing, BTC price stands at $20,664, up 1.10% in the last 24 hours, according to price tracking platform CoinMarketCap. In just minutes after the decision was announced, BTC price jumped by 0.88%.
The Fed committee mentioned the adverse effects of the Russia Ukraine war on the global economy. “The war and related events are creating additional upward pressure on inflation and are weighing on global economic activity.”
In this context, the Fed committee said it believed the latest rate hike would help restrict inflation in the future. It said the move is “appropriate to sufficiently restrictive to return inflation to 2 percent over time.”
Powell Hints At Slowing Rate Hike In Future
Federal Reserve chairman Jerome Powell said during the FOMC press conference that at some point down the line, it will become appropriate to slow pace of rate hikes. “We still have some ways to go. Incoming data since our last meeting suggests that the ultimate level of interest rates will be higher than previously expected.” Earlier, the FOMC found that inflation remained elevated in the country.
“Inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher food and energy prices, and broader price pressures.”
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