The US Federal Reserve has increased interest rates by 75 basis points, the highest since 1994, to reduce the rising inflation rates.
Source: Federal Reserve
BTCUSD is down -3.77%
The Federal Open Market Committee has also announced that it will keep reducing the size of its balance sheet at a rate released in May.
The Fed Funds rate, the level at which commercial banks can borrow and lend their extra reserves overnight, will rise to a range of 1.5% to 1.75%.
The Bond traders are pricing at a range of 3.25%-3.5% by the end of the year as part of a reportedly aggressive monetary tightening.
The Federal Reserve Chair Jerome Powell says that the current situation is clear, adding that the labor market was tight and inflation at a high level. Powell has committed that the central bank will hold on to its steps until they get enough evidence that inflation is coming down.
The steps come amid a cryptocurrency market crash that has seen bitcoin dip to trade under $21k. Consumer Price Index report showed elevated inflation at 8.6%.