Krisztian Sandor is a reporter on the U.S. markets team focusing on stablecoins and institutional investment. He holds BTC and ETH.
the interest rates steady at 5.25%-5.5% Wednesday, as expected, and held its projection of three rate cuts for this year,Policymakers on the Federal Open Market Committee forecast they would lower interest rates to 4.6% by the end of 2024, according to the March meeting's economic projection, the same median level as their
However, the so-called"dot plot" showed only one participant expected more than three cuts this year, compared to five members in December. The dot plot is the Fed committee members' outlook on interest rates over the next year and offers investors a glimpse into policymakers' expectations.Crypto hedge fund QCP Capital said earlier Wednesday that if the dot plot were to show less cuts for this year instead of three, it would be bearish for bitcoin.
Before the FOMC announcement, most market participants had priced the first rate cut for June. Now, the market puts 70% odds for at least one rate cut by June, up from over 60% earlier, according toConsumer Price Index and Producer Price Index reports, sparking concerns that inflation might accelerate and forcing the U.S. central bank to keep financial conditions tight and delay rate cuts, potentially weighing on asset prices.
"Tighter monetary policies dampen risk appetite in financial markets while lower rates increase the allure of asset classes such as crypto," digital asset management firm 21Shares noted Wednesday.was trading around $64,000 before the meeting from its overnight low of $60,700, then spiked to $64,700 in the immediate aftermath of the decision. The CoinDesk Bitcoin Index (in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin.
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