Fed Hikes Interest Rates by 75 Basis Points, the Highest in 28 Years

Fed Hikes Interest Rates

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%.


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