Hi HODLers and Hiveans,
The big event that a lot of Finance and Crypto bros have been waiting for just happened.
And it was... as expected.
FED decided to raise interest rates by 25bps (0.25%) bring its rate to 5-5.25%.
During his speech, Jerome Powell metioned a few times that the goal was to reach 2-3% inflation and that the FED will be committed to reach these levels to assure price stability.
Then Powell replied to journalists' questions.
“Inflation has moderated somewhat since the middle of last year,”
“Nonetheless, inflation pressures continue to run high, and the process of getting inflation back down to 2% has a long way to go.”
A lot of the questions were on the debt ceiling and a possible"default" from the US Government which Powell brushed away as he thought this would probably not happen and if it did, it would have a cataclysmic effect for the entire world.
FED moving into Wait&See Mode!
In the past years, FED has been giving a forward guidance to help the market anticipate the future hikes. This time, Powell mentioned he will look at the data on a weekly basis and make decisions based on the data coming in.
In another way, he does not know if this should be the end of hikes and will wait the last minute to take a decision. I believe this is right as I feel the exact same way as an investor. I cannot figure out if we are going into recession or just slowing down before reaccelerating. Data is contradictory.
Instead of saying that “ongoing [interest rate] increases” will likely be needed, Powell said, “some additional policy firming may be appropriate” at the U.S. central bank’s previous Federal Open Markets Committee.
Bitcoin and Ethereum prices?
Well, it was a non-event for financial markets and it seems it is also not having a huge impact for cryptocurrencies. Bitcoin and Ethereum are mostly flat.
Stay safe out there,
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