The critical FED meeting that the markets had been waiting for a while ended, and the FED announced the decisions it took at the FOMC meeting.
The Fed kept the interest rate unchanged in line with expectations.
It was noteworthy that the explanations regarding the temporary nature of inflation were removed from the text of the resolution.
In addition, the FED announced that it has decided to accelerate its tapering decision. Accordingly, the monthly reduction amount of 15 billion dollars was increased to 30 billion dollars.
FED’s decisions were expected and priced in advance by the markets. The absence of a surprise decision was welcomed by the markets.
After the decision, Bitcoin rose again to $ 49,000 and Ethereum to $ 4000. While the risk turned positive increased the risk appetite of the buyers, the Fed Chairman Powell also made statements about cryptocurrencies.
Powell’s statements that he does not see cryptocurrencies as a risk to the financial system and that stablecoins can be beneficial if they are regulated were also received positively.
We tried to instantly announce the FED decision and Powell’s statements on our Twitter page. For more, you can follow our Twitter page from the link below.
The Fed kept interest rates steady.#Bitcoin
— Bitcoin System (@bitcoinsystem) December 15, 2021
Highlights of the Decision:
The interest rate was held constant.
Asset purchase reduction rate was increased from $15 billion to $30 billion.
The median forecast of the Fed was three rate hikes in 2022 and three rate hikes in 2023.
The US economy cut its 2023 growth forecast from 2.5% to 2.2%.
FED’s statements regarding the temporary nature of inflation were not included in the final decision.
The Fed will purchase at least $40 billion monthly in treasury papers and at least $20 billion monthly in mortgage-backed securities.
Statements by Fed Chairman Powell:
We will not increase interest until the process of reducing asset purchases is over.
I do not see cryptocurrencies, which are more speculative assets, as a risk to financial stability. But I think they are risky, they are not supported by anything.
Stablecoins are not properly regulated at the moment. I support the work of the presidents on this issue.
If stablecoins are properly regulated, they can usefully and efficiently serve as part of the financial system.