Markets

The Fed raises interest rates again, the cryptocurrency market is mixed

The US Federal Reserve raised interest rates again in an effort to curb inflation. The cryptocurrency market had mixed reactions to the rally.

Interest rates hit their highest in 16 years after the central bank raised its benchmark rate by a quarter of a percent to 5.1 percent.

The Fed raised interest rates to the highest level in 16 years

All major stock indices sank shortly after the Fed announced an interest rate hike. However, cryptocurrencies showed mixed reactions. In the past 24 hours, Bitcoin and Ethereum have gained 2% after a small drop following the announcement. Other major altcoins remain silent on the hourly chart. The broader market looks largely unchanged after a short pullback.

The decision came as a result of the continued rise in inflation, which has slowed in the past months. US consumer inflation dropped in March but remained at 5%. The annual rate is well below 6% in February.

Experts interpret the 25 basis point increase, which sent interest rates to their highest level in 16 years, as a signal of a possible pause at the next meeting.

What will come to the markets?

Some analysts earlier predicted that the Federal Reserve would halt its practice of tightening monetary policy amid a banking crisis. However, in a recent review by the Board of Governors of the Federal Reserve System, the failure of the Silicon Valley bank was linked to “mismanagement.” Furthermore, the review described the US banking system as “sound and resilient, with strong capital and liquidity.”

Federal Reserve Chairman Jerome Powell speaks after raising interest rates | CNBC

Federal Reserve Chairman Jerome Powell addressed the crisis in a press conference following the interest rate hike. he He saidAnd

“Running in Silicon Valley Bank has been off-limits to run throughout history. And that now needs to be reflected in some way in regulation and oversight.”

However, economists worry that a tenfold hike in interest rates in one year could cause the economy to slow down or even lead to a recession. It may be US regional banks exposed to to systemic risks as a result of the increase, according to banker Uday Kotak of Kotak Mahindra Bank. newly a report It highlights that uninsured depositors in nearly 190 regional banks are still withdrawing money, stressing the system. This could be a possible reason why the cryptocurrency markets do not take the news very badly.

Meanwhile, the Hong Kong Monetary Authority (HKMA) also more interest rates on Thursday.

Disclaimer

Adhering to the Trust Project’s guidelines, BeInCrypto is committed to providing unbiased and transparent reporting. This news article aims to provide accurate and timely information. However, readers are advised to independently check the facts and consult with a professional before making any decisions based on this content.

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