• The Federal Reserve Board recently voted to raise interest rates by a quarter of a percentage point.
• Markets responded positively, with Bitcoin prices even breaching the $24k mark.
• This is the smallest rate rise since March 2022, signaling a moderation in the pace of its rapid tightening throughout 2022.
Fed Raises Interest Rate
The Federal Reserve Board recently decided to increase interest rates by another quarter of a percentage point. This marks the smallest rate rise since March 2022 and signals a moderation in the pace of its rapid tightening throughout 2022.
Positive Crypto Market Reaction
The crypto market reacted positively to this news, with Bitcoin price even breaching the $24k mark. At the time of writing, Bitcoin is trading at $23,823 and is up 4% in the last 24 hours as per CMC. The 10-year Treasury yield has also decreased from 3.9 percent at year’s end to 3.5 percent now.
Stocks Increase on Tuesday
Stocks increased on Tuesday due to the Federal Reserve beginning its two-day meeting, with the technology industry as a whole seeing a 9% monthly increase. A surprising impact on inflation may be triggered if these market responses spark too-rapid increases according to CNBC.
Federal Reserve Continues To Be Vigilant About Inflation
The Federal Reserve continues to be vigilant about inflation and Chairman Jerome Powell delayed raises at this meeting despite it being widely anticipated that he would do so. Despite this being their weakest rise in a year, they remain diligent and determined in their fight against inflationary pressures.
Overall, markets responded positively after news broke out that the Fed had decided to raise interest rates by another quarter of a percentage point – this being their weakest rise in over a year – indicating that they are moderating their fight against inflationary pressures and remain vigilant about potential impacts on markets going forward.