The US Federal Reserve (FED) increased interest rates by half a point for the first time since May 2000. Bitcoin (BTC), the largest cryptocurrency, is up about 1 percent on the news and is currently trading at $39,141 on the exchange. The largest cryptocurrency, BTC, jumped along with stocks. Here is what happened and the latest data…
Bitcoin (BTC) and other altcoins are on the rise
The aggressive monetary policy of the central bank aims to combat out-of-control inflation, which has reached the highest level in the last forty years. As we reported on Kriptokoin.com, the Fed increased the benchmark short-term interest rate by 25 basis points in March, but consumer prices continued to rise persistently despite the reduction in supply shortages. The US Federal Reserve (FED) hopes to calm the economy by making it more expensive to borrow money.
The central bank’s hawk U-turn has also taken some strength from the cryptocurrency market. Bitcoin, Ethereum (ETH) and other leading cryptocurrencies were beaten this year along with stocks. Interest rate futures show the Fed has a 94 percent chance of raising its benchmark short-term borrowing rate to at least 2.75 percent by the end of the year.
FED points to rising inflation
At the press conference, Powell said inflation was “too high” and “well above target”. He argues that lowering consumer prices is essential to maintaining a strong labor market. He said there might be more “surprises” next time. According to Powell, additional increases of 50 basis points will be on the table in the upcoming meetings. However, the central bank is not “actively considering” 75 basis points increases at this point. Powell said the US would be positioned to handle monetary tightening.
Bitcoin’s rise to Ethereum (ETH), BNB (BNB), Solana (SOL), XRP (XRP), Terra (LUNA), Cardano (ADA) and Avalanche Major cryptocurrencies like (AVAX) followed suit. ETH rose 4.2 percent, BNB 3.3 percent, SOL 7.6 percent, XRP 5.3 percent and ADA 10.4 percent. Popular meme coins DOGE and SHIB rose 3.5 percent.
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