The much-anticipated interest rate decision by the Federal Reserve has been revealed, capturing the attention of cryptocurrency investors. The rate cut itself is significant, but the signals from the Fed are even more critical.
Fed Interest Rate Decision
The decision to cut interest rates by 50 basis points has been announced.
Fed Projections
The Fed has updated its interest rate projections: - The median rate forecast for the end of 2024 is 4.4% (previously 5.1%). - The median rate forecast for the end of 2025 is 3.4% (previously 4.1%). - The median rate forecast for the end of 2026 is 2.9% (previously 3.1%). - The median rate forecast for the end of 2027 is 2.9%.
Market Reaction
Following the decision, Bitcoin's price tested $61,000. Upcoming statements from Jerome Powell will be crucial. Significant downward revisions in rate cut forecasts from Fed members are a positive sign for risk markets. Fed: “We will carefully assess incoming data, evolving outlooks, and risk balances when considering additional rate adjustments.” Fed: “The FOMC has gained further confidence that inflation will progress sustainably towards 2%, assessing risks to employment while balancing inflation targets.”
The Fed's interest rate cut and more positive projections on inflation and economic growth have led to increased optimism in the markets, which is particularly important for cryptocurrency investors.
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