Federal Open Market Committee of the US Federal Reserve (FOMC) announced that they will meet next week on March 21-22, 2023. While the central bank should address the issue of controlling inflation, it is expected to take into account the banking crisis, and this is obviously necessary. In the United States, the consumer price index hovers at 6% annually, well above the Fed’s 2% target. The central bank will also consider measures to protect investors if the banking crisis worsens in the coming weeks.
The banking industry has been hit hard in the last 12 months as their investments in bonds, treasury bills and securities have become less profitable due to rising interest rates. Cryptocurrency In the market, the Bitcoin price has risen greatly in the last week and has managed to stay away from banking events. However, previous examples of price corrections prior to Fed meetings could be replicated ahead of next week’s decision.
No Interest Decision Is Expected From FOMC Meeting
Although the banking crisis has changed the dynamics in the market, FedIt is not expected to increase interest rates. However, although some expectations point to an increase of 25 basis points depending on the steps taken, as a result, it may be positive for crypto money prices as it is in line with the expectations in the market. Jerome Powell spoke in the context of stronger economic data and potential higher inflation. It could also mean that bank stocks continue to trade in the red, and thus crypto prices rise.
However, analysts also predict that the Fed may choose to pause the rise this time, but the target probability may change ahead of the meeting. Currently, the CME FedWatch Tool, which measures the probability of the Federal target rate, shows that there will be no 38% increase at the next meeting and a 25 basis point increase of 63%. With the increasing dynamics in the macro environment and the banking sector, Bitcoin price may see a sideways movement or a minor correction before the meeting.
You can follow the current price action here.