Bitcoin approached the $30,000 mark on July 26 following the announcement of a fresh interest rate hike by the Federal Reserve. Data from Cointelegraph Markets Pro and TradingView showed that Bitcoin’s price performance strengthened after the Federal Open Market Committee (FOMC) raised rates by 0.25%. However, the cryptocurrency had yet to react to a press conference scheduled with Fed Chair Jerome Powell at 2.30 pm Eastern Time.
The press conference, which traditionally signals increased risk asset volatility, was eagerly anticipated by market participants who closely watch Powell’s language for any indications of future policy changes. Prior to the announcement, monitoring resource Material Indicators remarked in a Twitter post that any deviation from the expected 0.25% rate hike could cause a logical reaction in the market. However, they also noted that Powell typically telegraphs his intentions, making surprises unlikely.
Confirming a 25 basis points hike, the benchmark interest rates now stand at their highest level since 2001. In an accompanying press release, the FOMC hinted that it would be prepared to take additional measures if the roadmap to achieve 2% inflation encounters obstacles. The release stated that the committee seeks to achieve maximum employment and 2% inflation over the longer run. It also mentioned that the committee will assess additional information and its implications for monetary policy when determining the extent of additional policy firming.
Despite bringing interest rates to their highest level in 22 years, the rate hike was overwhelmingly expected by the markets, with nearly 99% odds that it would occur. CME Group’s FedWatch Tool, however, showed that there was less certainty regarding the likelihood of a repeat at the next FOMC meeting scheduled for September.
Financial commentary resource The Kobeissi Letter discussed the implications of the rate hike, noting that while every FOMC member had voted for it, this did not necessarily indicate complete harmony over policy at the Fed. The publication argued that between every meeting, Fed officials publicly disagree with each other, raising questions about the true level of unity on key policy decisions.
As always, it is essential to note that this article does not provide investment advice or recommendations. Investing and trading involve risks, and individuals should conduct their own research before making any decisions.
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