0
0
US Federal Reserve Maintains Steady Interest Rates
The US Federal Reserve announced on March 20 that it would keep interest rates steady at 5.25% to 5.5%, aligning with market expectations and easing concerns of a more aggressive tightening of monetary policy. Additionally, the Federal Open Market Committee (FOMC) maintained its projection for a rate cut within this year, signaling a cautious but optimistic outlook for the economy.
Fed Chair’s Speech Boosts Crypto Market
Fed chair Jerome Powell’s expected speech caused the crypto market to bounce back to near-yearly highs after days of heavy bleeding ahead of the FOMC meeting. Bitcoin (BTC) was trading at $68,032 as of press time — up 6.52% — after falling to a low of $60,800 earlier in the day, according to CryptoSlate data.
- The wider market similarly rebounded from local lows, with most tokens posting gains between 5% and 15%.
- Some tokens including the memecoin Pepe (PEPE) and Bitcoin Layer-2 Stacks (STX) recorded gains of over 20% as the day’s biggest winners.
The bullish momentum could take the market back to the previous week’s highs much sooner than anticipated, despite prevalent bearish sentiment in the preceding days.
Rate Cuts Forecasted by June
The Fed’s decision arrives in the wake of unexpectedly high Consumer Price Index (CPI) and Producer Price Index (PPI) reports, which ignited concerns that inflation could gain momentum. During the FOMC’s March meeting, policymakers forecasted a reduction in interest rates to 4.6% by the end of 2024, echoing the same median level projected in the December outlook.
The affirmation has quelled fears among investors who were apprehensive about a potential hawkish pivot in the Fed’s strategy amid fluctuating economic indicators.
Revised Economic Forecasts
Accompanying this rate decision, Fed policymakers have also revised their economic forecasts, uplifting the US growth outlook for this year to 2.1 percent from a previous forecast of 1.4 percent made in December. This upgrade highlights a more optimistic view of the economy’s resilience and potential for expansion.
However, the inflation outlook remains a complex challenge, with the headline inflation forecast holding steady, while the projection for annual “core” inflation has been slightly elevated to 2.6 percent.
This decision comes after the Fed’s aggressive policy actions since March 2022, increasing the policy rate in response to rising price pressures and adopting a watchful stance as it navigates through economic uncertainties.
Bitcoin and Crypto Market Data
At the time of press 10:17 pm UTC on Mar. 20, 2024, Bitcoin is ranked #1 by market cap and the price is up 7.06% over the past 24 hours. Bitcoin has a market capitalization of $1.34 trillion with a 24-hour trading volume of $68.48 billion.
At the same time, the total crypto market is valued at $2.56 trillion with a 24-hour volume of $171.73 billion. Bitcoin dominance is currently at 52.28%.
Image/Photo credit: source url
