Fed Opts For Lower Rate Increase, Crypto, Equities Shimmy – Crypto News – Crypto News
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Fed Opts For Lower Rate Increase, Crypto, Equities Shimmy Fed Opts For Lower Rate Increase, Crypto, Equities Shimmy

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Fed Opts For Lower Rate Increase, Crypto, Equities Shimmy – Crypto News

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In a widely anticipated move, the Federal Reserve moved to bump interest rates by a quarter of a percentage point Wednesday, marking the start of what markets hope will be a prolonged period of smaller hikes.

The US central bank cited Russia’s ongoing war in Ukrainecontinued heightened inflation and a need to reach maximum employment as reasons for the slower-paced hike.

The move marks the Fed’s eighth successive The rate hike, a strategy it hopes will curb the highest inflation the country has seen in more than four decades, but analysts remain worried a soft landing may be a tall order.

“The Committee anticipates that ongoing increases in the target range will be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2 percent over time,” Federal Open Market Committee (FOMC) members wrote in a statements at the end of their two-day policy meeting on Wednesday.

Bitcoin and ether fell slightly on the news, declining 0.2% and 0.3%, respectively.

The S&P 500 and Nasdaq Composite indexes also falter, losing about 0.7% and 0.5%, respectively, immediately after the Fed released its decision.

Even with some relatively promising economic data, the major market moves are far from behind us, Craig Erlam, senior market analyst at Oanda, said, noting that Powell’s 2:30 pm ET remarks will give markets a better idea of ​​whether peak hawkishness really has to install.

“There is growing evidence that rate hikes have worked in cooling the economy, inflation, and the labor market, but the question is whether the Fed believes it has done so enough, particularly on the core measure where inflation could prove more stubborn,” Erlam added.

At the December meeting, committee members stated they believed that interest rates would ultimately hit between 5% and 5.25%, at a median level. These estimates are scheduled to be recalculated in March. When asked his expectations for what the final rate level might be, Powell said there is still uncertainty, but markets should be prepared for a higher level.

“I don’t feel a lot of certainty about where that will be,” Powell said during Wednesday’s press conference. “It could certainly be higher than we’re writing down right now.”

Traders should be certain that the Fed will continue to watch macroeconomic conditions, analysts say. While progress has been made, betting on a complete Fed pivot at this stage of the game would be ill advised.

“Clearly, inflation is declining (we are seeing that pretty much everywhere) but we should not expect it to be a linear process (there will be gains and some setbacks), but broadly, disinflation remains a positive for the market, and certainly much better than where we were last year, and that’s encouraging,” Tom Essaye, founder of sevens report research, wrote in a note Wednesday.

This is a developing story,

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