Fed Chairman Jerome Powell said in a statement today that increasing the benchmark interest rate by 50 basis points will be on the table at the Federal Open Market Committee (FOMC) meeting in May.
According to experts, this statement is significant as it shows how aggressively the authorities will implement a plan to reduce the US inflation rate of 8.5%, the highest inflation rate in the last 40 years. In recent years, it was not uncommon for the FED to increase interest rates by more than 25 basis points at a time.
Fed Chairman Powell: “50 basis points rate hike is on the table”
Speaking at the meeting organized by the IMF and attended by European Central Bank President Christine Lagarde and other IMF representatives, Powell said the following on the subject:
“I would say 50 basis points increase is on the table for the meeting in May.”
At the March meeting, the FOMC members agreed to a 25 basis point increase, but Powell said it would be “appropriate to act faster.”
“Price Balance Needed To Be Restored”
In his final statement, Powell added:
“It is absolutely essential that we restore the price balance. The actual inflation peak may have occurred in March, but we cannot know it, so we will not rely on it.
Indeed, we will raise interest rates and quickly raise them to more neutral and tighter levels. Once we get to that level, we’ll know if he’s a good fit.”
Cryptocurrency Considering that the market is moving increasingly in correlation with the stock market, we can definitely say that crypto investors will follow these macroeconomic indicators. As known of bitcoin The 90-day correlation between the performance of the S&P 500 and the S&P 500 reached the highest level of the last 17 months in March.
This statement by Powell was the last information that FED officials would give to the public before the two-day meeting to be held on May 4. FED officials avoid commenting on the economy and interest rates as the meeting dates approach.
*Not investment advice.