In a much-awaited announcement, the US Federal Reserve has raised its interest rates by 25 basis points to a target range of 5%-5.25%. This marks yet another hike in the central bank's ongoing policy of gradually increasing interest rates. However, the leading cryptocurrency Bitcoin (BTC) has remained relatively stable despite the announcement, trading at around $28,600 immediately following the news.
Investors had been eagerly anticipating the Fed's decision, with many closely following Federal Reserve Chairman Jerome Powell's post-meeting press conference for further clues. While the interest rate hike was widely expected, investors were keen to hear more about the Fed's accompanying policy statement, which hinted at tighter credit conditions.
The statement noted that "tightening credit conditions" were a forward-looking pressure on the economy. The FOMC also indicated that it would take into account a range of factors when assessing the situation, including delays in monetary policy affecting economic activity and inflation, as well as financial developments.
Despite inflation dropping from nearly double-digit levels a year ago to around 5% currently, it remains well above the Fed's 2% target. This suggests the need for further tightening of monetary policy, which could impact Bitcoin prices in the future.
However, at the time of writing, Bitcoin has remained largely unaffected by the Fed's decision, trading at around $29,250. Investors remain optimistic about the cryptocurrency's long-term prospects, with many seeing it as a hedge against inflation and a potential store of value in uncertain economic times.
