How Bitcoin Reacted to January’s Highly Anticipated FOMC Meeting

By akohad Feb2,2023

[ad_1]

Following another Federal Open Markets Committee (FOMC) meeting on Wednesday, the Federal Reserve agreed to raise its benchmark interest rate by 25%.

Bitcoin did not react with its usual fervor to the news, continuing to trade slightly above $23,000. 

  • The rate hike brings the Fed’s benchmark rate between 450 and 475 basis points – its highest level since late 2007. The 25-point raise was in line with market expectations, and milder than December’s 50-point hike. 
  • Bitcoin traded for roughly $23,000 prior to the announcement and saw little action in its aftermath. It briefly rose to $21,150, only to return to $23,050 at writing time. 
  • Bitcoin is up 37% since last month after rallying alongside tech stocks in response to bullish inflation data from December. 
  • With inflation on the way down, market participants began to suspect that the Fed may be prepared to “pivot” – slowing down or reversing its interest rate hikes, thus making investment easier. 
  • Indeed, the S&P 500 is up 6% since early January, while NASDAQ is up 11%. However, the Dow Jones Industrial Average fell by about 1% on the day
  • Nevertheless, the Federal Reserve has made no indication that it plans to lower interest rates in the near future.
  • A JP Morgan analyst called on the Fed to stop hiking entirely last month but still expects more interest rate increases until May, at which point the Fed may hold rates over 5% until the end of 2023. 
Bitcoin /USD. Source: TradingView
SPECIAL OFFER (Sponsored)

Binance Free $100 (Exclusive): Use this link to register and receive $100 free and 10% off fees on Binance Futures first month (terms).

PrimeXBT Special Offer: Use this link to register & enter POTATO50 code to receive up to $7,000 on your deposits.

[ad_2]

Source link

By akohad

Related Post

Leave a Reply

Your email address will not be published. Required fields are marked *