Fed raises interest rates by 75 bps
The Federal Reserve (Fed) announced it is raising the interest rates by 75 bps. It’s the fifth increase in 2022. In just seven months, the Fed has raised the federal funds rate by a total of 3.0 percentage points.
Target range for federal funds rate increases to 3.0% to 3.25%
On September 21, the Federal Open Market Committee announced a further interest rates increase by 75 bps.
JUST IN: 🇺🇸 U.S. Federal Reserve raises interest rates by 75bps.— BTCATH (@btcathcom) September 21, 2022
The decision was made in the context of ongoing high inflation in the United States and represents a continuation of the Fed’s monetary policy since March 17, 2022. It is the third 75 bps increase, following increases in June and July and the fifth increase overall in 2022. The target range for the federal funds rate increases to 3.0% to 3.25%. In contrast to its current monetary policy, the Fed kept the federal funds rate at around zero in the first quarter of 2022.
Further increase was already announced by Powell in July
Federal Reserve Chair Jerome Powell already announced at the last meeting of the Federal Open Market Committee on July 27 that a further increase would be appropriate due to inflation.
JUST IN: 🇺🇸 Federal Reserve Chair Jerome Powell says #inflation is too high and another unusually large rate increase could be appropriate at next meeting.— BTCATH (@btcathcom) July 27, 2022
This announcement has now become true. The Federal Open Market Committee also explained its decision with the consequences of Russia’s war in Ukraine and rising energy prices, which additionally affect inflation and the world economy:
Russia’s war against Ukraine is causing tremendous human and economic hardship. The war and related events are creating additional upward pressure on inflation and are weighing on global economic activity. The Committee is highly attentive to inflation risks.
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 to 3-1/4 percent and anticipates that ongoing increases in the target range will be appropriate.
Crypto market remains stable
Shortly after the decision was announced, the Bitcoin price dropped significantly to $18,600, but fully recovered shortly after. Still, there is a long way to go for Bitcoin to reach its all-time high of $69,045 again.
This article does not provide investment advice. Historical cryptocurrency data is not a guarantee of future market developments. The author may hold several of the cryptocurrencies mentioned in this article.
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