Bitcoin Rally Despite Fed Raises Interest Rates By 75 Basic Points
The Fed makes history with a second massive rate hike in as many months, which seems predictable before inflation is still rising. However, the action of the bulls this time seems more drastic as the Bitcoin (BTC) price has been pushed to $22,000.
Bitcoin jumped over 8% in the past 24 hours, along with the stocks rally, as Federal Reserve Chairman Jerome Powell said he doesn’t think the United States is in a recession. Bitcoin’s 1-hour chart shows a candle that increased by more than 4% at the time of the Fed announcement.
The Fed on Wednesday raised a key U.S. interest rate by 75 basis points, the fourth hike this year, in an aggressive bid to combat the hottest inflation in four decades. The press release stated:
“Inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher food and energy prices, and broader price pressures.”
The market predicts that 75 basis points will be the next move by the Fed. However, commentators are increasingly looking at the central bank’s balancing act between curbing inflation and avoiding future impact recessions.
Besides Bitcoin, Ether has also recorded a spike as the $1500 price zone is reclaimed.
Analyst Dylan LeClair commented on the Fed’s actions: “Repricing happens fast.”
During last month’s FOMC meeting, Powell explained that the committee’s intention was not to induce a recession. However, hints at this meeting towards continued obstacles facing the borrowers of the economy via rising rates leave little room for positive economic growth.
The chairman explained that a recession is more than a probability. It’s likely to happen due to continued rate increases.
Powell made it clear that further increases are likely to come, and the FOMC believes the economy needs to slow down for the U.S. to reclaim any hope of price stability.
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