Bitcoin rises to $ 49,000 as the Fed leaves rates unchanged

Bitcoin rises to $ 49,000 as the Fed leaves rates unchanged.

Federal Reserve officials decided to leave rates unchanged at Wednesday’s meeting, keeping rates between 0 and 0.25%.

Bitcoin price rose 3.4% on the news and hit a new intraday high of over $ 49,000 on the Bitstamp exchange. The bulls currently have resistance in sight at $ 52,000.

According to a statement from their officials, the Fed will keep interest rates near zero until full employment is reached. Speaking at a press conference, Chairman Jerome Powell said it was unclear how long the labor shortage would last:

The economy has made rapid strides towards maximum employment. How long the labor shortage will last remains unclear, especially as more waves of the virus emerge.

Policy makers’ median forecast suggests three rate hikes by 2022. Three more rate hikes are expected in 2023.

The central bank has also doubled the rate of bond purchases, which is falling by $ 30 billion a month.

Market observers are looking for signs that the Fed is determined to finally withdraw its economic support amid ongoing inflation concerns. The central bank was well on its way to abandoning its massive stimulus package, which many believe was driving up the prices of assets like Bitcoin, in March.

Powell stated that the Fed will not hike rates until the tapering is over:

Basically we now have two more meetings to complete the cone.

In particular, the Fed is no longer using the controversial word “transient,” criticized by former Twitter CEO Jack Dorsey and other experts, to describe inflation.

Last week, the consumer price index showed prices were rising as fast as they have been since 1982.

That level of inflation is incompatible with price stability, Powell said.