After the two-day monetary policy meeting, the Federal Reserve (Fed) announced that it would raise interest rates by 1 yard, which was in line with market expectations. Although the statement stated that it would continue to raise interest rates, Fed Chairman Jerome Powell admitted that inflation has begun to slow down. Encouraging the three major U.S. stock indexes to rebound synchronously, driving the cryptocurrency market to rise together, and Bitcoin has been rising all the way, regaining the $24,000 mark.
Before Powell’s press conference, the Federal Open Market Committee (FOMC) raised the federal funds rate by 0.25 percentage points, as expected, to a target range of 4.5% to 4.75%, the highest rate level in 15 years.
In the policy statement, the Fed still emphasized its high attention to the risks of inflation. Although inflation has slowed down a bit, it still remains high and said that it is appropriate to continue raising interest rates. The Fed will still raise interest rates according to economic conditions, and will not There will be an interest rate cut decision expected by the market, and officials have emphasized that it is still necessary to continue to increase the interest rate range.
Traders are pricing in an 86 percent chance of another 1-point rate hike in March, according to CME’s FedWatch tool.
At the post-meeting press conference, Powell opened with a hawkish attitude, reminding reporters that the battle against inflation has not yet been won, and promised that the Fed will always be committed to bringing inflation back to its 2% goal.
Powell also admitted that the process of “disinflation” (disinflation) has begun. As soon as this statement came out, investors were ecstatic, driving the stock market and the cryptocurrency market to rise sharply. The major U.S. stock indexes turned from an initial decline to a sharp rise. The Nasdaq index rose 2% to close at 11,816.32 points; the Philadelphia Semiconductor Index rose 5.19% to close at 3,073.47 points.
At press time, Bitcoin (BTC) was trading at $24,094.68, up 4.2% over the past 24 hours, according to CoinGecko market data; Ether (ETH) was up 5.9% at around $1,683; Binance Coin (BNB) was up Ripple (XRP) rose 2.7% to about $0.41; Cardano (ADA) rose 4.3% to about $0.40.
An analyst at MICA Research, a cryptocurrency research team, pointed out, “This wave of rebound can be regarded as the exhaustion of bad news, but this rise is quite strange, because the previous interest rate futures showed a 100% chance of raising interest rates by 1 yard, so this news is not a big deal. Market surprise.”
Analysts believe that the reason why the market rose is likely because the Fed has previously raised interest rates on a large scale by 3 yards and 2 yards, but this time it is the first time to raise interest rates by 1 yard, which encourages investors to put funds back into the market. However, analysts cautioned:
Since the market is currently quite optimistic about inflation data, they all believe that interest rate hikes will be further slowed down. We think that expectations are a bit too optimistic. We suggest that we be more careful in dealing with the current potential risks in the market. If the price index “surprises” next month, The correction will then be even greater.