The much-anticipated decision from the Federal Reserve about May’s interest rates is out. In today’s Federal Open Market Committee (FOMC) meeting, they decided to keep interest rates the same, sparking optimism in the cryptocurrency community.
What impact should you expect? Read on!
Chairman Jerome Powell, in today’s FOMC meeting, announced that interest rates will remain unchanged, hovering between 5.25% to 5.5%. Despite expectations for rate cuts to boost economic growth, the Fed stands firm. Powell stresses the need to stabilize inflation rates closer to the 2% target, currently at an undesirable 3%.
Today’s FOMC meeting focused mainly on concerns about inflation, despite recent signs of improvement. The decision to keep rates steady reflects the Fed’s cautious approach amidst economic uncertainties.
After the FOMC announcement, the cryptocurrency market saw a flurry of activity. Santiment, a top financial analysis firm, noted the community’s hopes for rate cuts to lift both equity market caps and cryptocurrencies.
“many in crypto were hoping for this May 1st decision by the US #Fed to result in interest rate cuts, which would in turn bolster equity market caps, and cryptocurrencies by association.”
Santiment
Although rates remained unchanged, there was a noticeable bounce in crypto prices, with altcoins experiencing breakout moments.
“many altcoins have enjoyed some breakouts immediately after the news, as traders begin to feel more comfortable making speculative #buys again now that this month’s decision is behind them.”
Santiment
Bitcoin faced a significant dip ahead of the FOMC meeting, dropping to lows of US$56,600. However, it managed a modest recovery to US$57,708 following the announcement.
Bitcoin’s volatility has been influenced by various market events, including ETF launches in Hong Kong and the recent Bitcoin halving event. Despite short-term fluctuations, Standard Chartered predicts a surge to US$150,000 by year-end.
While short-term volatility persists in the cryptocurrency world, there’s a consensus on long-term growth. The Fed’s decision to maintain rates indirectly supports market stability, providing investors with a sense of continuity and averting panic-induced reactions to potential rate hikes.
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