cryptocoin.com As we have reported, the latest FED Minutes published by the Federal Reserve (FED) explains the critical points regarding the last meeting held on March 21-22, 2023. The minutes of the FED, published at the last meeting, show that the authorities lowered the expectations for a peak in interest rates due to the turbulent times in the banking sector. However, it is also stated in the reports that some FED officials are considering stopping the interest levels in March. So, what do the records indicate? Here are the details…
According to FED minutes, officials lowered their expectations for a peak in interest rates due to difficulties in the banking sector!
At the U.S. Federal Reserve’s policy meeting last month, many Federal Reserve officials considered holding back rate hikes until it became clear that the failure of the two regional banks would not cause wider financial stress, but ultimately concluded that high inflation remains a priority.
“Some respondents considered whether it would be appropriate to keep the target range fixed at the meeting to assess how developments in the financial sector might affect lending and the course of the economy,” according to the Fed Minutes article released Wednesday of the March 21-22 meeting of the Federal Open Market Committee.
But, according to the minutes, these officials and others appeared to agree that measures taken by US policymakers and the Fed “helped to calm conditions in the banking sector and reduce near-term risks to economic activity and inflation,” and supported a quarter-point rate hike despite new financial sector uncertainty. .
However, inflation “remained well above the Committee’s long-term target of 2%,” and Fed officials “recent inflation data suggesting little sign that inflation pressures are declining fast enough to return inflation to 2 percent over time. They agreed on it.”
The minutes showed a committee that was forced into an unexpectedly complex debate due to the bankruptcies of Silicon Valley Bank and Signature Bank, but ultimately proceeded with higher interest rates.
FED officials point to “light recession”!
“Some respondents … stated that if it were not for recent developments in the banking sector … they would have considered an increase of 50 basis points,” the minutes read. However, according to what is written in the minutes, “Participants agreed that the latest developments in the banking sector will affect the monetary policy decisions of the Board to the extent that these developments affect the employment and inflation outlook and the risks surrounding this outlook.” His words were also noteworthy.
According to the minutes of the FED, at the meeting in March, policy makers weakened their commitments to further rate hikes, removing the need for “continuous increase” from the policy statement, and stating that only “a little more” tightening may be needed. they observed that it continued; As a result, they predicted that some additional policy tightening might be appropriate.”
Price reaction of the markets
After the announcement of the FED minutes, the price of Bitcoin lost 0.5 percent and is instantly traded at $ 30,038.95. With a market cap of $579 billion, the leading cryptocurrency has surpassed $30,000, and many investors’ eyes are on Bitcoin and gold after the FED minutes.
On the other hand, the dollar index also reacted. The US dollar remains at session lows as the Dollar Index slides 0.65 percent to its lowest close since early February. EUR/USD rallied to test the 1.1000 region. U.S. bond yields have held steady, with U.S. 10-years around 3.43% and 2-years just under 4 percent.
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