TL; DR
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The Fed just announced that they will not change US interest rates for a while and will leave them unchanged at 5.25%-5.50%, which resulted in a small drop in value for BTC, but the impact was small.
Full story
There you have it: the Fed just announced that they will not change US interest rates for a while and will leave them unchanged at 5.25%-5.50%.
(That means people won’t have more money in your pocket to spend on risky assets such as crypto).
The decision to hold interest rates was widely expected by analysts!
What was not widely expected, however, was that Fed Chairman Jerome Powell gave little to no indication that a rate cut would occur in September.
(Something he probably did would would have done if this decision was teetering on the edge of a ‘yes, we will let him make cuts now’).
As a result, crypto markets fell slightly (with BTC down ~2% at the time of writing, compared to before the Fed rate decision announcement).
But here’s the good news:
In the past, when interest rates rose or stayed the same (i.e. anything short of a rate cut), crypto markets fell considerable.
Less volatility related to the news cycle signals an asset class that is maturing.
(We’d love to see it).
In other good news, Jerome Powell said earlier this week, and we quote, “inflation has declined substantially” – leading to a small increase in the value of BTC.
Whether they will hold rates steady in September or make their first cut since March 2020 is anyone’s guess at this point.
A lot can happen in just a few months!