This Wednesday, June 15, 2022, the US Federal Reserve (Fed) aaraised interest rates by 75 basis points, as expected. After the announcement, most crypto-currencies initially traded higher.
The Federal Open Market Committee “decided to raise the target range for the federal funds rate to 1-1/2 to 1-3/4 percent and anticipates that future increases in the target range will be appropriate,” according to a statement from the Fed.
How have Bitcoin and Ethereum reacted?
the bitcoin (BTC) fell in reaction at this news, before bouncing back afterwards. Bitcoin (BTC) therefore rose by more than 2% to reach $21,560 in just one hour. At the same time, Ether (ETH) rose by 6%, reaching $1,180.
The shares evolved in parallel, the S&P 500 index rising 0.17% in the hour after the news was released.
The Fed statement
The Fed’s statement also indicates that it plans to continue to reduce its holdings in treasury securities, agency debt and mortgage-backed securities. The Fed is “firmly committed” to restoring inflation to 2% as soon as possible. Meanwhile, according to the Fed’s future rate projections, the Fed will begin cutting rates in 2024.
This increase was greater than the increase by 50 basis points that Fed officials had previously indicated they wanted to enforce, but it was in line with expectations after the release. The Federal Reserve’s policy meeting in May resulted in the first rate hike since 2000. Inflation has risen rapidlyprompting the Fed to act.