Bitcoin Trades Flat After Fed Maintains Interest Rate Level…
The Federal Reserve announced no change to its policy interest rate following its Federal Open Markets Committee (FOMC) meeting on Wednesday.
Likewise, Bitcoin’s price showed little change after the announcement, down just 0.17% on the day.
Per the Fed’s announcement, the central bank “decided to maintain the target range for the federal funds rate at 5-1/4 to 5-1/2 percent.”
The statement noted that while job gains have slowed, they remain elevated. Unemployment is also still low, while inflation remains above target.
The decision was largely predicted by markets and signals a potential peak for the Fed’s rapid rate hiking regime that began early last year.
In a Monday interview, BlackRock’s Marilyn Watson predicted that the Fed’s target rate will likely remain flat until the end of the year, with modest rate cuts beginning in late 2024.
On Tuesday, Wharton economist Jeremy Siegel predicted that the stock market may show “firm” growth until the end of 2023, even without rate cuts. Crypto prices have historically correlated with the stock market – especially in the context of interest rate decisions.
That said, crypto market analyst TXMC warns of a pending recession in 2024 due to the economy’s tight credit conditions, which could be bearish for stocks and Bitcoin alike.
“Tighter credit conditions for households and businesses are likely to weigh on economic activity, hiring, and inflation,” added the Fed in its statement. “The extent of these effects remains uncertain.”
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