Bitcoin Stays Calm Amid Fed 25bps Rate Hike to 5%

The Federal Reserve has increased its benchmark rate to between 5% and 5.25%, with Bitcoin’s price showing little reaction to the news.

The market had largely predicted the rate hike, with the central bank raising interest rates to combat high consumer price index inflation. Some financial experts, like BitMEX co-founder Arthur Hayes, had speculated that the Fed might stop raising rates and even begin lowering them sooner than expected due to bank failures.

However, the Fed has remained firm in hiking rates, stating that it will adjust its monetary policy if risks emerge that could hinder its goals.

Despite a reduction in inflation to 5%, there are concerns that the Fed’s efforts to protect the banking system could lead to an increase in inflation in the future.

The FOMC has announced its goal to achieve maximum employment and 2% inflation in the long run.

The committee has also stated that it will consider previous actions, policy delays, and economic and financial events in deciding on future actions, unlike previous meetings where it anticipated further rate hikes.

It is now expected that the rate hikes will be put on hold to assess macroeconomic conditions

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