Crypto:
30336
Bitcoin:
$65.057
% 0.12
BTC Dominance:
%54.2
% 0.09
Market Cap:
$2.37 T
% 0.16
Fear & Greed:
60 / 100
Bitcoin:
$ 65.057
BTC Dominance:
% 54.2
Market Cap:
$2.37 T

Federal Reserve Holds Rates Steady Amid Inflation Concerns

Federal Reserve

Although there are worries over inflation, the Federal Reserve made the decision to leave its benchmark interest rate intact. Even though he did not believe a rate hike to be close, Chairman of the Federal Reserve Jerome Powell did recognize the challenges of achieving a 2% inflation target. Though Powell did not give a date for the coming rate cut, he emphasized that inflation pressure should be known well enough to do so.

Immediately after the announcement, the news spread through the cryptocurrency market like a shockwave, as Bitcoin (BTC) shot up by around 3 percent. Following the FOMC, the leading cryptocurrency rapidly retracted most of the move and has since traded virtually unchanged.

Fears for ongoing inflation led the Federal Reserve to take the decision. New evidence of higher-than-anticipated rates of inflation and wage growth in the first quarter has just made these concerns even worse. Although the inflation rate has been on a declining trend ever since hitting multi-decade highs in 2022, it is still higher than the 2% per year target set by the Federal Reserve. Stability in the inflation data in comparison to the previous month—3.5% for the year ending in March—jostled the cryptocurrency markets instantly.

Rates have not been this high for more than 23 years due to the fact that the Federal Reserve has kept its benchmark interest rate between 5.25 and 5.5 percent since last July. Contrary to the Fed’s expected three quarter-point rate cuts for 2024, market players are now looking forward to one or no rate cut by year-end, a complete reverse from their early hopes. Given that inflation has not abated as fast as thought, significant cuts might still be on the table, Chairman Powell noted.

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READ:  Federal Reserve Holds Rates Steady Amid Inflation Concerns

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