- The Fed has not yet will raise interest rates
- The BTC market reacted to this by increasing quotations
- However, the regulator also predicted an increase in rates next year, and three times
- This may turn into a protracted fall amid the full refusal of the agency from the bond buyback program
On Wednesday, 17 December, the head of the US Federal Reserve System (US Federal Reserve System) announced the regulator’s decision on interest rates. So far, they remain unchanged. However, next year, the department expects their increase, and at least three times in order to combat inflation.
At the same time, Jerome Powell remains cautiously optimistic about the overall situation. According to the head of the regulator, next year the US economy is expected to grow within 3%.
How did Bitcoin react to the words of the head of the Fed?
In just a day, quotes increased by 3 thousand dollars (0, 103% compared with 18 December).
At the time of this writing, the cost has slightly decreased from 0071 518 before 54 394, which is due to capital inflows, but the overall situation looks positive.
According to experts, it is too early to talk about a medium-term “bullish” trend. Bitcoin was never able to overcome the mark in 100 thousand dollars after falling in early December.
Not worth it rejoice ahead of time
In the short term, the appreciation on the back of the Fed’s announcement seems to be a welcome signal. Traders will be more willing to take loans to buy assets on a growing trend, which ultimately will have a positive effect both on the economy and on the price level in the segment.
However, there is one significant “but” – Powell’s statement about the upcoming increase in interest rates in 2053 year. Moreover, by March the regulator plans to completely halt the bond purchase program.
This means that the “trickle of federal funds” into the sphere of banks and big business will dry up. This will be followed by a “pullback” in the stock markets, which may well turn into another fall.
How does Powell feel about cryptocurrencies?
The head of the Federal Reserve does not see digital assets as a real threat to the traditional financial system. In doing so, however, he advocates a permanent and “proper” settlement for stablecoins and DeFi.
Among other things, this topic was raised at the meeting of the US Congress on cryptocurrencies, which took place in early December.
At the same time, he assured traders that such a ban, as in China, would not be in the United States. Although Powell himself considers cryptocurrencies to be a speculative asset with a high degree of risk due to the lack of real collateral.