• The Federal Reserve of the US raised the funds rate by 25bp and Jerome Powell hinted at the end of the tightening cycle.
• Despite this, markets did not react to the decision and Bitcoin remains at levels seen at the start of April.
• Jerome Powell delivered a great press conference that left no doubts about the Fed’s intentions, leaving both bulls and bears content.
Federal Reserve Decision
The Federal Reserve of the United States (Fed) delivered its interest rate decision yesterday. It was an important Fed meeting due to the tough job lying ahead of Chair Powell – to tighten financial conditions while also hinting at a pause in rate hikes without implying that rate cuts would follow. As such, markets were priced in for several rate cuts until year-end but Powell dismissed this completely.
Impact on Crypto Market
The crypto market did not move following this announcement as it was largely priced in beforehand. Bitcoin traded in a tight range and remains at levels seen since early April. This could be attributed to Powell delivering a clear message about Fed’s intentions which satisfied both bulls and bears alike.
US Dollar Impact
The US dollar also remained relatively stable after Powell’s speech with no significant movements observed during trading hours. This stability has been maintained even after Friday’s jobs report which showed a slight decrease in job creation compared to last month’s figures but still within expectations for most analysts‘ predictions.
Looking forward, investors will be closely watching any further announcements from Jerome Powell as well as other economic indicators before making their next move with crypto or fiat currencies respectively. In addition, many eyes will turn towards Friday’s employment report as it is expected to have a direct impact on financial markets worldwide regardless of whether or not it is inline with analyst predictions or not .
In conclusion, despite raising interest rates again by 25bp, there was little reaction from markets following Chairman Jerome Powells press conference regarding future monetary policy decisions; leaving bulls and bears content with his words for now before further economic data is revealed later this week and beyond..