Critical Statements for Gold and Bitcoin: Fed President Speaks!

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The FOMC interest rate decision was the focus of gold and cryptocurrency investors today. The Federal Reserve left interest rates unchanged in line with expectations. Following this announcement, gold prices made a strong move and exceeded 2 thousand dollars. Bitcoin continues its rise above $42,000 with a similar move. After the interest rate decision, Fed Chairman Jerome Powell appeared in front of the cameras.

Fed interest rate decision and highlights

cryptokoin.comAs you follow from , the US Federal Reserve (Fed) left the policy rate unchanged. In its statement on Wednesday, the Fed announced that it left the federal funds rate, which is the policy rate, unchanged in the range of 5.25%-5.5% after its December meeting. This decision came in line with market expectations. Meanwhile, the revised Summary of Forecasts (SEP) showed that Fed officials’ median view on the policy rate at the end of 2024 is 4.6%. The market perceived the policy statement as dovish. Key takeaways from Fed policy statement

  • Inflation has decreased but remains high. The FOMC remains committed to returning inflation to its 2% target.
  • Data show economic activity slowed from its strong pace in the third quarter.
  • A range of economic factors will be taken into account when determining the scope of any additional policy tightening that may be appropriate.
  • Employment gains are moderate. However, it remains strong. Additionally, the unemployment rate remains low.
  • Tightening financial and credit conditions are likely to put pressure on economic activity, hiring and inflation. However, the extent of the effects remains unclear.
  • The Fed will continue to reduce bond purchases as previously planned.

Jerome Powell makes critical statements

Federal Reserve Chairman Jerome Powell began speaking and answering questions at the post-decision press conference.

  • Inflation has decreased without a significant increase in unemployment.
  • Inflation is still very high.
  • The road ahead is uncertain.
  • We are fully committed to returning inflation to 2%.
  • We have tightened monetary policy significantly.
  • Our actions moved the policy rate into restrictive territory.
  • The full effects of the tightening are probably not yet felt.
  • Considering where we are now and the uncertainties, we are proceeding cautiously.
  • We will make future decisions based on the totality of data, the evolving outlook, and upcoming risks.
  • Growth in economic activities has slowed significantly.
  • Activities in the housing sector have stagnated.
  • High interest rates also put pressure on fixed investments.
  • The labor market remains tight but is gaining better balance.
  • We expect the easing in the labor market to continue, which will put downward pressure on prices.
  • The low inflation figures in the last few months are pleasing.
  • We estimate core PCE prices rose 3.1% in the 12 months ending November.
  • We predict that it will take some time for inflation to reach 2%.
  • Our restrictive stance puts downward pressure on economic activity and inflation.
  • While we believe our policy rate is likely at or near its peak for this cycle, we have encountered surprises in the past.
  • We are ready to tighten the policy further if appropriate.
  • We will keep policy restrictive until we are confident on the path to 2% inflation.
  • Policymakers do not want to take the possibility of additional increases off the table.
  • We will adjust policy as needed and not on a predetermined route.
  • We will continue to make our decisions in meetings.
  • We are still focused on the question of whether interest rates are high enough.
  • It is not possible for us to raise interest rates further.
  • Fed policy makers think and talk about when it would be appropriate to lower interest rates.
  • We are seeing strong growth that appears to be moderate, and inflation is making real progress.
  • We still have a way to go.
  • No one is declaring victory, that would be premature.
  • There is no guarantee of progress, so we are treading carefully in assessing whether we need to do more.
Fed Chairman

Fed dot chart highlights

  • The median opinion of officials for the end of 2025 is 3.6% (previously 3.9%).
  • Fed funds rate at the end of 2026 is 2.9% (previously 2.9%), according to the median view of officials
  • Fed projections point to a 75 basis point interest rate cut from the current level in 2024.
  • The median view of the authorities on the interest rate in the long term is 2.5% (previously 2.5%).”
  • No policymaker sees the end-2024 policy rate above the current level.
  • According to Fed projections, 8 out of 19 officials see the policy rate above the 2024 median, and 5 see it below.
  • Authorities see inflation at 2.4% in 2024, returning to the 2% target in 2026.
  • Policymakers see weaker GDP growth and the same unemployment rate in 2024 compared to September forecasts.

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