Bitcoin price recovers after Fed fails to announce rate hike at FOMC

The Federal Reserve decided to hold its benchmark interest rate from 5.25%% to 5.5% at the highly anticipated Federal Open Market Committee (FOMC) meeting on Wednesday, after a fearsome 6% drop of the price of Bitcoin earlier that day.

Within five minutes of the announcement, the price of Bitcoin went from $57,300 to $57,700

According to a news release, the central bank said it also plans to reduce the speed at which it sells U.S. Treasuries starting in June, reducing its monthly repayment limit from $60 billion to $25 billion . Market participants overwhelmingly expected the Fed to hold its interest rate at 5.25% heading into the meeting, hoping cuts could kick in in the fourth quarter. However, the central bank’s words confirmed market fears that the central bank may need to keep rates higher for longer to quell nationwide price inflation, which remains stubbornly above 3%. “The Committee does not expect it to be appropriate to reduce the target range until it has gained more confidence that inflation is moving sustainably toward 2 percent,” the Fed wrote. The economy also remains surprisingly resilient: data compiled by Bloomberg Intelligence suggests that 81% of S&P 500 companies that have reported first-quarter earnings beat their first-quarter expectations. Bitcoin price is known to be influenced by central bank policy and macroeconomic liquidity conditions.
Some analysts such as BitMEX co-founder Arthur Hayes believe BTC will continue to break above $100,000 as central bank balance sheets continue to expand. BTC/USD. Source: TradingView SPECIAL OFFER (sponsored) LIMITED OFFER 2024 for CryptoPotato readers on Bybit: Use this link to register and open a $500 BTC-USDT position on Bybit Exchange for free!