The US Federal Reserve (Fed) kept the policy rate unchanged for the second time in a row in November, keeping it constant in the range of 5.25%-5.5%. FOMC Chairman Jerome Powell is expected to speak after the meeting. Powell will talk about the policy outlook and answer questions at the press conference at 21:30 ET. Since Fen’s interest rate decision came in line with expectations, gold and Bitcoin prices have not shown a serious reaction for now.
The highly anticipated Fed Interest Rate Decision has arrived, gold and BTC gave a partial reaction!
cryptokoin.comAs you follow from , gold and Bitcoin markets were waiting for the Fed’s interest rate decision. The US Federal Reserve kept the interest rate constant, in line with expectations. The market position showed that it was fully priced in that there would be no change in the Fed’s policy rate. As a result, the price of gold and Bitcoin did not show any significant reaction to the decision at press time. Meanwhile, the US Dollar Index fell slightly with the sudden reaction. Finally, it was at 106.90 with an increase of 0.18% during the day.
The Fed reiterated in its policy statement that a number of economic factors will be taken into account when determining the scope of additional policy tightening that may be appropriate. Investors still see a roughly 20% chance the Fed will raise interest rates by another 25 basis points (bps) before the end of the year, according to the CME Group FedWatch Tool. For this, markets will look for clues in Fed Chairman Jerome Powell’s speech. President Jerom Powell will appear before the cameras at 21:30 CET.
Key takeaways from the Fed interest rate announcement
- Economic activity expanded at a strong pace in the third quarter. Employment increases remain moderate but strong.
- Inflation continues to remain high. The policy-making committee is determined to return inflation to the 2% target.
- Tightening financial and credit conditions are likely to put pressure on economic activity, hiring and inflation. However, the extent of the effects remains unclear.
- It is ready to change its policy stance accordingly if risks to achieving the objectives emerge.
- There was consensus in favor of the policy.
Has the Fed reached the end of the cycle?
Economists at ABN Amro say the Fed is reaching the end of its tightening cycle. In this context, analysts made the following statements:
We think July is the last hike of the cycle and that benign core inflation readings will give the FOMC confidence to keep policy on hold in the coming months. We continue to expect the Fed to start reducing interest rates starting next March. Falling inflation will raise real interest rates, and the recent jump in bond yields represents a significant tightening in financial conditions.
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