Last night, the amount of US interest rates was determined at the meeting of the Federal Open Market Committee. According to forecasts, the interest rate increased by 75 basis points. In reaction to this news, the prices in the crypto market first increased, but we saw the return of the downward trend in prices again. Bitcoin’s $18,700 support remains intact.
According to Mihan Blockchain and quoted by CoinDesk, the meeting of the Federal Open Market Committee (FOMC) was held last night. In this meeting, the increase in the interest rate of 75 basis points (BPS) was considered.
What was the reaction of the world markets to the increase in interest rates?
Major indices of the stock market were bullish yesterday before the announcement of the interest rate. But after announcing a 75-point increase in interest rates, the Nasdaq and S&P 500 indices each fell by 1.7%. The Dow Jones Industrial Average (DJIA) also fell 1.8%; Because the Federal Reserve’s comments indicated that stronger anti-inflationary policies are on the way.
The Federal Reserve raised interest rates by 75 basis points for the third time in a row
The Federal Reserve decided to raise interest rates by 75 basis points for the third time in a row after the latest price data showed higher-than-expected inflation (8.3%). The federal interest rate will increase to a range of 3% to 3.25%, which is the highest rate since late 2007. This rate remained close to zero for more than two years. At the Federal Reserve meetings, it has been decided that the central bank will raise interest rates by a total of 1.25% during the two remaining FOMC meetings this year. The interest rate may increase up to 4.4%.
The Federal Reserve hopes to reduce inflation to 2%, in the previous report of Blockchain Homeland, we saw that the current US inflation is 8.3%, the highest level in four decades. Federal Reserve Chairman Jerome Powell said during a press conference referring to his speech at the Federal Reserve Economic Symposium last month at the Jackson Hole Conference:
My main goal [برای کاهش تورم] It has not changed at all. The FOMC is very determined to get inflation down to 2%, and we will continue to do so until the job is done.
It is expected that the interest rate increase will continue until 2023 in order to reduce the inflation rate.
According to a statement from the Federal Open Market Committee (FOMC), spending and output grew modestly. Employment has increased in recent months and the unemployment rate has remained low.
- Bitcoin price: At the beginning of the announcement of this news, the prices faced a slight increase. In such a way that the price of Bitcoin increased from the range of $19,200 to $19,900. But this increase was temporary and less than 6 hours later, the price dropped below the level of 18,200. This level is the lowest price in the last 14 weeks. Currently, the $18,700 support has been withdrawn and Bitcoin is trading at $18,890. The volume of Bitcoin transactions in the last 24 hours has exceeded 49 billion dollars and its dominance is 39.4%.
- Ethereum price: Ethereum also showed a similar reaction to the announcement of the interest rate hike, initially rising from $1,340 to above $1,400. Then it started to decline and fell to the $1,200 range. At the time of this writing, the price of Ether is down 4% from the previous day to $1,279. The 24-hour trading volume of ether is more than 21 billion dollars and its dominance is 17%. Ether digital currency has experienced a downward trend after the update of the Ethereum platform. Investors may be eyeing the “Shanghai Ethereum Upgrade” that will allow users to withdraw staked ETH and is due to take place next year.
- The price of altcoins: Other cryptocurrencies followed a similar price pattern, rising and then falling immediately after the interest rate announcement. So that the price of EOS (EOS) decreased by more than 10% and YGG and ADA both decreased by more than 4%. The digital currency Ripple has been among the most positive major cryptocurrencies in the market in the last 24 hours with a gain of nearly 7%. You can see the changes of the 10 biggest cryptocurrencies in terms of market capitalization in the image below that shows the price data of the blockchain homeland.
- How much was the US interest rate hike announced at the FOMC meeting?
In the meeting of the Federal Reserve’s Free Market Committee on September 21 (30 September), the interest rate increase of 75 basis points was announced.
- What effect did the interest rate hike in September have on the cryptocurrency market?
In the first hour after the interest rate hike was announced, prices in the crypto market rose. But then the prices began to fall and the downward trend of prices resumed.