Key Points:
The minutes of the March Federal Open Market Committee (FOMC) meeting indicated that numerous US Federal Reserve policymakers considered a halt in interest rate increases.
They were only inclined to grow once it was evident that the US regional banking crisis, which was at its pinnacle at the time, would not have a larger financial effect.
Yet, they determined that rising inflation was so important that they proceeded with a rate rise despite the danger.
After an unexpectedly complex debate that reshaped some policy views in real-time, the dramatic developments following Silicon Valley Bank’s March 10 failure did little to derail the Fed’s rate-hike campaign, with officials convinced they could combat inflation with one set of tools while stabilizing financial markets with others.
According to the most recent FOMC minutes release, Fed members reaffirmed their core aim of preventing excessive inflation. However, the crypto market reacted little to the news, with the Bitcoin price remaining roughly constant.
According to the paper, the Fed staff forecasted a modest recession beginning later in 2023. Markets were anticipating the US central bank to suspend the rate rise in 2023 before embarking on what is known as a Fed Pivot in the form of rate reduction.
“Several participants noted that, in their policy deliberations, they considered whether it would be appropriate to hold the target range steady at this meeting. They noted that doing so would allow more time to assess the financial and economic effects of recent banking sector developments and of the cumulative tightening of monetary policy.”
The minutes showed a committee driven into an unusually complicated discussion by the collapses of Silicon Valley Bank and Signature Bank but eventually pushing ahead with increased interest rates.
The Bitcoin price and other crypto exchange markets, as well as equities, bonds, and other liquid financial markets, will have the remainder of April to absorb the news.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
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Harold
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