Crypto Market Turns Green On Release Of FOMC Minutes; Interest Rates Remain A Concern
On Wednesday, the Federal Reserve’s minutes from its most recent policy meeting provided greater insight into the depth of discussion at the American central bank regarding how much further interest rates may need to rise in order to curb inflation & cool down an economy that has outperformed forecasts despite monetary tightening.
Highlights From the FOMC Minutes
According to the minutes that were made public, almost all of the officials at the most recent meeting of the Federal Reserve supported a hike of 25 basis points (bps), with the exception of a few officials who favored or could have supported a hike of 50 basis points (bps). Almost all participants observed and agreed that slowing the pace of rate increases at the current juncture would allow for appropriate risk management.
It’s important to note that some participants held the opinion that there was a heightened possibility of a recession in 2023 and reserved their opinions on greater jobless claims. However, following the most recent report on nonfarm payrolls from the Bureau of Labor Statistics, –which stated that the United States has added 517,000 jobs for the month of January–the discussion regarding recession was reportedly dropped.
All of the participants were of the opinion that it was necessary to keep moving forward with the plan to lessen the size of the Federal Reserve’s security holdings, which was outlined in the document titled “Plans for Reducing the Size of the Federal Reserve’s Balance Sheet,” released some time earlier. The minutes showed that Fed members were still alert to the risk that they may have to do more in order to keep inflation low, which is a hawkish bent that may come into more exact view when policymakers issue new interest rate and economic estimates at a meeting scheduled in four weeks.
As per the official minutes released, the Fed was quoted as saying:
Participants concurred that the (Federal Open Market) Committee had made significant progress over the past year in moving toward a sufficiently restrictive stance of monetary policy
After a year of consecutive rate hikes of 75 basis points and half a percentage point, the Federal Reserve decided to return to a more standard rate-hike size at the conclusion of the meeting that took place on January 31 and February 1. The Fed raised its overnight interest rate by a quarter of a percentage point.
At the time of writing, the crypto market presented a slighter bullish momentum as Bitcoin’s (BTC) price traded at 23,800, representing a gain of 0.41% in the past one hour.
This is a developing story and is being frequently updated.
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