The post Fed holds interest rate steady at 23-year high, possible rate cut coming September appeared on BitcoinEthereumNews.com.

Key Takeaways Fed’s rate hold aligns with expectations, Bitcoin price shows minimal immediate reaction. Market anticipates September rate cut, potentially boosting crypto investment sentiment. The Federal Reserve announced today that it will keep its benchmark interest rate unchanged, maintaining the federal funds rate at 5.25% to 5.5%. This decision, aligns with widespread market expectations and signals the Fed’s continued cautious approach to monetary policy amid shifting economic conditions. “Recent indicators suggest that economic activity has continued to expand at a solid pace. Job gains have moderated, and the unemployment rate has moved up but remains low. Inflation has eased over the past year but remains somewhat elevated. In recent months, there has been some further progress toward the Committee’s 2 percent inflation objective,” the Federal Reserve said in a statement. Implications for crypto markets This decision arrives against a backdrop of moderate inflation, with the US consumer price index (CPI) showing a 3.3% year-on-year increase in June. This economic indicator has already positively influenced crypto markets, suggesting a potential correlation between inflation trends and digital asset performance. For the crypto market, particularly Bitcoin, the Fed’s decision carries significant weight. While the immediate impact of a rate hold may be limited, the longer-term implications of the Fed’s monetary policy direction could be substantial. Historically, periods of lower interest rates have been favorable for risk assets, a category that includes crypto, given how such assets reduce borrowing costs and by implication encourage investment in non-traditional assets. The crypto market’s reaction to the Fed’s decision will be closely watched, especially in light of recent events. The movement of $2 billion worth of Bitcoin from a DOJ entity just days before the FOMC meeting has introduced an element of uncertainty. This government action, coupled with the Fed’s decision, shows the complex interplay between regulatory…

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Filed under: News - @ August 1, 2024 12:24 am