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Fed Raises Rate by 75bps, Good News for Bitcoin and Ethereum?

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This Wednesday, June 15, 2022, the US Federal Reserve (Fed) aaraised interest rates by 75 basis points, as expected. After the announcement, most cryptocurrencies initially traded higher.

The Federal Open Market Committee “decided to raise the target range for the federal funds rate to 1-1/2 to 1-3/4 percent and expects that future increases in the target range will be appropriate,” according to a statement from Pinaka.

How has Bitcoin and Ethereum reacted?

THE bitcoin (BTC) fell in reaction on this news, before jumping in afterwards. That’s why Bitcoin (BTC) rose more than 2% to reach $21,560 in just one hour. At the same time, Ether (ETH) rose by 6%, reaching $1,180.

The shares changed in parallel, the S&P 500 index rising 0.17% an hour after the news was released.

The statement by the Fed

The Fed’s statement also indicates this plans to continue to reduce its holdings in treasury securities, agency debt and mortgage-backed securities. The Fed is “firmly committed” to restoring inflation to 2% as soon as possible. Meanwhile, according to future Fed rate projections, the Fed will begin cutting rates in 2024.

This the increase is greater than the increase of 50 basis points that Fed officials had previously indicated they wanted to implement, but this was in line with post-release expectations. The Federal Reserve’s policy meeting in May resulted in the first rate hike since 2000. Inflation rose rapidlywhich prompted the Fed to act.

Source: The Blog

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