Last minute! FED Announces Its Historic Interest Rate Decision! Here’s Bitcoin’s First Reaction!

The Fed kept interest rates steady. The expectation was that it would remain constant.

After the Fed’s rate decision Bitcoin (BTC) The price reacted as follows:

From now on, FED Chairman Powell’s speech at 21:30 will be followed.

What Was the Outlook Before the Decision?

The Fed was expected to keep interest rates unchanged for the first time since the US central bank launched a historically aggressive round of monetary policy tightening in March 2022.

The new data released on Wednesday supported the views that inflation would slow down. The Producer Price Index, a measure of the costs businesses pay for the goods and services they use in their products, had increased by 1.1% in the 12 months to May. This was the smallest annual increase since December 2020, well below the 1.5% increase expected by economists in the Reuters poll.

While the US economy continues to provide strong employment and wage increases on a monthly basis, the ratio of current vacant jobs to the number of unemployed in the labor market, one of the metrics closely monitored by the FED, has recently increased as a sign of the continuing mismatch between labor market demand for workers and current workers.

The FED’s last quarterly forecasts predicted that the benchmark interest rate would fall by the end of 2024, with inflation falling. A real “return” to looser policy would only occur in 2025, when the policy rate was predicted to fall more than inflation at the end of the year.

*Not investment advice.