Fed raises rates 0.25%, Bitcoin stays at $23,000

Fed raises rates 0.25%, Bitcoin stays at ,000

The US Federal Reserve hiked rates this Wednesday (1st) by 0.25%, as predicted by much of the market. Considering that bitcoin even fluctuated up and down in the first few minutes, but with no significant changes.

Still trading at $23,000, the bulls now appear to have a clear path to reaching $25,000 soon, where they will find their greatest resistance.

In a note, the Fed was pleased with the unemployment numbers. However, he still seems concerned about dollar inflation “down slightly, but still high”.

So it is possible that the US BC will continue its monetary tightening, but the next rate hike should be as low as the previous one.

Fed still worried about US inflation

While US inflation fell 0.1% in December, annual data suggest it is still at 6.5%, far from the 2% target. Therefore, mainly because of this, the Fed continues to raise interest rates.

“Recent indicators point to modest growth in spending and production. Job growth has been robust in recent months and the unemployment rate has remained low. Inflation has fallen somewhat, but remains high.”

Therefore, an increase of 0.25% is now expected to be the limit if the Fed decides to continue with monetary tightening.

Bitcoin remains static at $23,000

The Fed meeting was expected by both the stock and cryptocurrency markets. While analysts agreed on the 0.25% decision, they followed the announcement live in case there were any surprises.

Therefore, already priced in, the 0.25% increase ultimately didn’t have that much of an impact on Bitcoin. Initially, the cryptocurrency fell 0.5%, then rose another 0.5% before retreating to the $23,000 price point where it was before the announcement. As for the cryptocurrency market, it remains above US$1 trillion in market cap.

Finally, Jerome Powell speaks live about the decision of the US Federal Reserve. As a highlight, the Fed president said that the measures are not yet being felt in the economy, which may indicate that monetary tightening may be coming to an end.

“My colleagues and I understand the difficulty posed by high inflation and we are determined to bring inflation back to our target of 2%”stated Jerome Powell. “Over the past year we have taken bold steps to tighten monetary policy, we have done a lot and the full effects of our rapid tightening have yet to be felt.”

Source: Live Coins