Following the Fed's decision to hold interest rates steady, US stock markets displayed mixed dynamics while Bitcoin's price increased.
Fed's Reaction to Economic Risks
The Federal Reserve announced its decision to keep the overnight borrowing rate at 4.25% - 4.5%. Fed Chair Jerome Powell noted that high tariffs could lead to slower economic growth, increased inflation, and rising unemployment. He stated, 'If the current large increases in tariffs remain, this could slow economic growth, induce long-term inflation, and increase unemployment.'
Stock Markets and Corporate Activities
US stock markets responded to the Fed's announcement with mixed results. The S&P 500 closed 0.1% higher, while the Dow Jones climbed 237 points (0.6%), bolstered by a surge in Disney shares. However, the Nasdaq dropped 0.3% due to declines in major tech stocks like Alphabet, which fell by 8%.
Bitcoin's Surge and Trader Behavior
After the Fed's announcement, Bitcoin rose by 1.7%, reaching $96,500. Over the past week, its value has surged by 22%. Traders are actively taking profits, which, according to analysts at CryptoQuant, indicates late-stage market behavior. They are monitoring for potential corrections if profits remain high.
The overall reaction to the Fed's actions highlights instability in the stock markets, while Bitcoin's rise points to active traders taking profits, signaling potential trends in the market.
