The Fed acts as expected, with comments from Chair Jerome Powell still to come as BTC/USD wakes up.
Bitcoin (BTC) saw instant volatility on Nov. 2 as the United States Federal Reserve enacted a fourth consecutive 0.75% interest rate hike.
BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView
Fed hints more hikes to com
The Fed confirmed the 0.75% hike, which marks its most intensive hiking schedule in forty years, in a statement.
“The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. In support of these goals, the Committee decided to raise the target range for the federal funds rate to 3-3/4 to 4 percent,” it stated.
“The Committee anticipates that ongoing increases in the target range will be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2 percent over time.”
Analysts had long predicted increased volatility around the rate decision. At the time of writing, Fed Chair Jerome Powell was still to deliver comments on the move, something markets would be keenly eyeing for trajectory cues.
“Beware, volatility will remain high during this event, fake-outs happen before the real move takes place!” Michaël van de Poppe, founder of trading firm Eight, told Twitter followers.
The Fed’s decision had been nonetheless widely expected, as per CME Group’s FedWatch Tool, with Cointelegraph reporting on a theory that sticking to the script would still offer crypto a shot at further upside.
Fed target rate probabilities chart. Source: CME Group
How long can the hikes go on?
Should Powell hint at possible slower increases or a pivot in policy, the situation could however turn dramatically.
“The market rallying ~13% off the lows was this expected 75 bps. It’s all about the presser now,” popular account CryptoISO summarized.
“We knew the fed had telegraphed an eventual slowdown/pause Not a pivot but more of a reassessment as data comes out to see how it is flowing through. 75 bps each time wont work.”Federal funds rate chart. Source: St. Louis Fed
The statement confirmed that Fed officials had voted unanimously for 0.75%.
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