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Federal Reserve Lifts Interest Rates Another 25 Basis Points

Bitcoin's price was little changed in the minutes following the announcement.

Na-update May 9, 2023, 4:07 a.m. Nailathala Peb 1, 2023, 7:03 p.m. Isinalin ng AI
Federal Reserve Board Chair Jerome Powell (Anna Moneymaker/Getty Images)
Federal Reserve Board Chair Jerome Powell (Anna Moneymaker/Getty Images)

Matching market expectations, the Federal Reserve's Federal Open Market Committee (FOMC) hiked its benchmark federal funds rate by 25 basis points to a range of 4.5%-4.75%.

Hovering in a narrow range on either side of the $23,000 level for the past several days, the price of bitcoin (BTC) remained in that area shortly after the announcement.

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With the 25 basis point rate hike largely priced in, markets were looking for clues in the accompanying policy statement about whether the central bank was mulling a pause in its monetary tightening cycle. For now, that doesn't appear to be the case, with the FOMC saying "ongoing increases" in rates will be necessary.

Interest rate futures markets are currently pricing in a terminal fed funds rate of 4.94%, suggesting the Fed has another one or two 25 basis point rate hikes left before hitting the brakes.

Federal Reserve Chairman Jay Powell will hold a post-meeting press conference at 2:30 p.m. ET.

Bitcoin is moving higher as Powell speaks, with traders taking note of the Fed chair saying, "[the] disinflationary process has started." Powell also seemed to suggest an end to the rate hike regime was among the topics discussed at today's meeting. Alongside bitcoin – now up to $23,450 – stocks and gold have moved into the green, while interest rates and the dollar are sliding.

Updated at 20:05 UTC: Added Powell remarks market reaction.

Read more: Bitcoin Little Changed on Soft Economic Data Ahead of Fed Meeting

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