Bitcoin and crypto investors will watch the markets keenly for the next 24 hours following the rate pause by the Federal Open Market Committee (FOMC).
As per initial predictions, after continuous rate hikes since early 2022, the Fed began pausing the rate hikes in mid-year. The Fed has extended its rate pause to about six months by holding the rates steady.
The interest rate range will remain between the 5.25% and 5.5% range, reached in July when they raised the rates by a quarter point.
This is the third consecutive meeting where the Fed paused rates after continuous rapid rate hikes. When the Fed first raised the rates in this cycle, the inflation had surged to about 8%, signaling a weakening economy.
The latest CPI data released yesterday indicates that the inflation rates in November only stood at 3.1%, a strong decrease from last year. This is a strong indication of an economic recovery.
Bitcoin Takes a Sharp Surge
Bitcoin, the largest cryptocurrency, took a sharp surge immediately after the rumors of a rate pause. The coin moved from $42K to $42.8K minutes after the rate hike decision.
Most other cryptocurrencies followed a similar course when the decision was announced.
Some analysts originally predicted that crypto markets would dive slightly, especially with the CPI data and the release of Fed announcements. However, Bitcoin’s current price actions suggest a possible continuous price surge for the next few hours.
Fed Interest Rate Cuts Will Wait till Mid-2024
Will the Fed cut the rates in the next meeting? Not likely!
All signs point to a possible rate cut in mid or towards the end of next year. Even analysts believe the first-rate cuts will occur sometime in July 2024.
This means that the Fed will likely continue with the rate pause in the next six months.
