all about cryptop referances
The US central bank’s Federal Open Market Committee (FOMC) met on Wednesday and raised the federal funds rate by 50 basis points (bps). The 0.5 percentage point increase follows the four consecutive three-quarter point increases codified over the past few months. The FOMC rate hike follows the recent US inflation report which indicated that consumer prices fell to 7.1%, which was lower than expected.
Following the Consumer Price Index (CPI) report published on Tuesday, members of the US Federal Reserve met on Wednesday and announced a 50 bps rate hike. The December increase is less than the last four three-quarter point (75bps) interest rate increases.
“The Committee seeks to achieve maximum employment and inflation at a rate of 2 percent over the longer term,” the FOMC said. “In support of these objectives, the Committee decided to raise the target range for the federal funds rate to 4-1/4 to 4-1/2 percent.” The Fed is projecting a further 75 bps increase in the federal funds rate by the end of next year.
The news follows Tuesday’s CPI data which rose less than expected as calculations show the inflation rate in November was up 7.1% from a year ago. The core CPI jumped 0.2% on the month, the US Bureau of Labor Statistics (BLS) noted. “Over the past 12 months, the index for all goods increased by 7.1 percent before seasonal adjustment,” the BLS CPI report details. The FOMC report notes that the Fed will continue to monitor “incoming information for the economic outlook.”
“In addition, the Committee will continue to reduce its holdings of government bonds and agency debt and agency mortgage-backed securities, as described in the Plans to Reduce the Size of the Federal Reserve’s Balance Sheet issued in May,” FOMC members revealed. “The Committee is strongly committed to bringing inflation back to the 2 percent target,” the FOMC added. After the interest rate increase and the bank signaling that more increases will be adopted, the stock markets and the prices of precious metals fell.
Crypto prices also fell, with the price of bitcoin (BTC) falling below the $18K zone following the FOMC statement. The Fed has codified a series of rate hikes this year with half a percentage point jump and four three-quarter point increases, making it a total of five federal funds rate hikes in 2022.
At the end of November, Federal Reserve Chairman Jerome Powell hinted during a speech at the Brookings Institution in Washington that an easing of interest rate increases could happen in December. Powell has faced political pressure regarding the interest rate hikes, and Tesla’s Elon Musk has warned against the aggressive hikes recently.
“We have more work to do,” Powell told reporters Wednesday afternoon, noting further that “inflation risks are on the upside.”
What do you think of the Federal Reserve’s interest rate hike on Wednesday? Let us know what you think about this topic in the comments section below.
Image credit: Shutterstock, Pixabay, Wiki Commons
Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or an endorsement or recommendation of products, services or companies. Bitcoin.com does not provide investment, tax, legal or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on content, goods or services mentioned in this article.
