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

The Fed increased the interest rate by 75 basis points. (Expected was 75 basis points)

It was already expected that the US Federal Reserve would raise interest rates again today and try to curb price increases.

“If we can’t lower inflation, we’re in trouble,” Fed Board member Christopher Waller said this month. So that’s our number one job.” he said.

bitcoin While the price was hovering at $19,528 before the decision, it seems to have reacted to this latest development as a decrease for now. Then, volatility increased tremendously in BTC, which recovered again.

Before the Fed decision, the Bitcoin price had fallen below $19,000 for a short time during the day.

Market Predicted FED Will Increase Interest Rates By 0.75 Points

Markets had predicted that the central bank would raise the benchmark interest rate by 0.75 percentage points, following similar rate hikes in June and July.

The Fed is increasing borrowing costs at the fastest pace in decades. But the steps he has taken so far have done little to curb the rapid rise in prices.

Annual inflation rate of 8.3% in the USA in August showed a slight decrease compared to the previous month.

While the price of gasoline has dropped sharply from its June record level, and used cars and airline tickets have gotten a bit cheaper, other costs continue to rise in the US, including essentials like rent, groceries and electricity.

Moreover, price increases in the US have also spread to goods and services that were not directly affected by the pandemic or the war in Ukraine, suggesting that inflation is gaining momentum that cannot be quickly reversed.

The FED has increased the benchmark interest rate four times this year, from near-zero levels to 2.375% before the last increase. By making it more expensive to buy a car, get a mortgage or use a credit card, the Fed hopes to reduce consumer demand, which is oversupply and driving prices up.

*Not investment advice.