Federal Reserve Raises Rate 50 Basis Points, FOMC Signals Rate Will Rise to 5.1% Next Year Cryptocurrency

[ad_1]

The US central bank’s Federal Open Market Committee (FOMC) met on Wednesday and raised the federal funds rate by 50 basis points (bps). The 0.5 percentage point increase follows four consecutive three-quarter point increases codified in recent months. The FOMC rate hike follows the recent US inflation report which showed consumer prices fell to 7.1%, which was below expectations.

Fed raises fed funds rate by 50 basis points, central bank expects more hikes ahead

Following Tuesday’s Consumer Price Index (CPI) report, members of the US Federal Reserve met on Wednesday and announced a 50 basis point rate hike. The December increase is less than the last four rate hikes by three-quarters of a point (75 basis points).

“The committee seeks to achieve a maximum employment and inflation rate of 2% over the long term,” the FOMC said. “In support of these objectives, the committee decided to increase the target range for the federal funds rate to 4-1/4 to 4-1/2 percent.” The Fed expects an additional 75 basis point hike in the federal funds rate by the end of next year.

“It will take a lot more evidence to provide confidence that inflation is on a sustained downward path,” Powell told reporters on Wednesday.

The news follows Tuesday’s CPI data which rose less than expected, with measures showing the inflation rate in November was up 7.1% from a year ago. Core CPI jumped 0.2% on the month, the US Bureau of Labor Statistics (BLS) noted. “Over the past 12 months, the All Elements Index rose 7.1% before seasonal adjustment,” the BLS CPI report details. The FOMC report notes that the Fed will continue to monitor “incoming information for the economic outlook.”

“In addition, the committee will continue to reduce its holdings of Treasury securities, agency debt and agency mortgage-backed securities, as outlined in the Federal Reserve’s balance sheet reduction plans released. in May,” the FOMC said. members disclosed. “The committee is firmly committed to bringing inflation back to its 2% target,” the FOMC added. After the rate hike and the bank’s announcement of further increases, stock markets and precious metal prices fell.

Crypto prices also fell and the price of bitcoin (BTC) fell below the $18,000 zone after the FOMC statement. The Fed has codified a number of rate hikes this year with a half-percentage-point jump and four three-quarter-point hikes, making it a grand total of five fed funds rate hikes in 2022. .

In late November, Federal Reserve Chairman Jerome Powell hinted during a speech at the Brookings Institution in Washington that an easing of rate hikes could very well happen in December. Powell has faced political pressure over rate hikes and Tesla’s Elon Musk has warned against aggressive hikes lately.

“We still have work to do,” Powell told reporters Wednesday afternoon, and he further noted that “inflation risks are on the rise.”

Tags in this story Benchmark bank rate, Central bank, economy, Fed, federal officials, Federal funds rate, Federal Open Market Committee (FOMC), Federal Reserve, FFR, Increase in FFR, FOMC, FOMC meeting, Government, inflation, Inflationary pressures, interest rates, jerome powell, political pressure, rates, rate hikes, Teslas Elon Musk, US central bank

What do you think of the Federal Reserve’s rate hike on Wednesday? Let us know what you think about this topic in the comments section below.

Jamie Redman

Jamie Redman is the news manager for Bitcoin.com News and a fintech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He is passionate about Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written over 6,000 articles for Bitcoin.com News about disruptive protocols emerging today.

Image credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is provided for informational purposes only. This is not a direct offer or the solicitation of an offer to buy or sell, or a recommendation or endorsement of any product, service or company. Bitcoin.com does not provide investment, tax, legal or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

More popular newsIn case you missed it

[ad_2]