Blogs & Articles: Bitcoin Rises Above $22,000 As Fed Raises Interest Rates By 0.75% đ 2 years ago
- Category: Blogs & Articles | Bitcoin Magazine: Bitcoin News, Articles, Charts, and Guides
- Author(s): Shawn Amick
- Published: 27th July 2022 20:45
The FOMC increased interest rates by 0.75 percentage point while indicating âunusually largeâ hikes may be appropriate in future meetings; Bitcoinâs price jumps.
- The FOMC raised target rates for the federal funds rate by 75 basis points.
- Federal Reserve Chairman Jerome Powell indicated âunusually largeâ increases could be appropriate in future meetings.
- Powell also stated a period of economic slowdown will be necessary to restore price stability.
The Federal Open Markets Committee (FOMC) raised its target interest rate for the federal funds rate by 75 basis points, or 0.75%, on Wednesday marking the highest back-to-back rate increase since the 1980âs.
The Chairman of the FOMC and Federal Reserve, Jerome Powell, addressed the rate increase during the customary follow-up press conference.
Powell began by noting that indicators for spending and production have both slowed, but attested that labor market conditions were still strong.
Additionally, Powell discussed a myriad of subjects including continued supply chain constraints, fears of recession, continued quantitative tightening, the Ukrainian war, and gave insight to future possible FOMC action as it relates to the rising pressures of inflation.
âAnother unusually large increase could be appropriate at our next meeting,â Powell warned.
During last monthâs FOMC meeting, Powell explained that the committeeâs intention is not to induce a recession. However, hints at this meeting towards continued obstacles facing the borrowers of the economy via rising rates leave little room for positive economic growth. In fact, the chairman explained that a recession is more than a probability ââ itâs likely to happen due to continued rate increases.
Powell made it clear that further increases are likely to come, and the FOMC believes the economy needs to slow down for the U.S. to reclaim any hope of price stability.
âThis process is likely to involve a period of below trend economic growth and a softening of labor market conditions,â he explained. âWe think itâs necessary to have growth slow down.â
Ahead of the press conference and news of the rate increase, bitcoinâs price rose above $22,000, briefly touching $23,000. The peer-to-peer digital cash was exchanging hands at $22,800 at the time of reporting.