Fed Rate Hike Decision News: The Federal Open Market Committee (FOMC) announced a 0.50% interest rate rise, as per the market expectation. The Fed said the repeat rate hikes at ongoing rate increases are likely appropriate. This marks a slowdown in rate hike after several months of rising rates by 75 bps amid inflation concerns. Following the encouraging 24 hours of crypto trading after the release of November Consumer Price Index (CPI) data, the stock markets have been on an upward curve on Wednesday. However, the Fed announcement led to a crash in crypto and stock prices.
The CPI rose at an annual 7.1%, which led to a rise in stocks on Tuesday. The latest FOMC interest rate decision came in the wake of recent comments from Fed chair Jerome Powell about potential slowing down of interest rate hike. Accordingly, the markets were in anticipation of a 50 bps interest rate rise. Fed chair Jerome Powell is expected to reveal economic projections on interest rates, unemployment, inflation and economic growth in the United States.
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In line with its long term plans, the FOMC said it sought to achieve maximum employment and inflation at the rate of 2 percent over the longer run. The committee said there was modest growth in spending and production while job gains have been robust in recent times.
“The Committee anticipates that ongoing increases in the target range will be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2 percent over time.”
Crypto Prices Go Down
In the last one hour prior to the rate hike announcement, Bitcoin (BTC) price rose by around 1.05%. This indicates a positive momentum with expectation of 50 bps rate rise. As of writing, BTC price stands at $17,953, up 1.27% in the last 24 hours, according to price tracking platform CoinMarketCap. However, BTC took a drop by 0.55% after the rate rise announcement.
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Meanwhile, the S&P 500 Index also registered a 0.68% drop in the day. This is compared to around 0.50% rise it saw before the announcement was made.
The post Breaking: Fed Hikes Rate By 50 BPS As Per Market Expectation, Stocks Go Down appeared first on CoinGape.
