Bitcoin, the primary crypto asset has surged past $62,000 following a favorable Federal Open Markets Committee meeting yesterday which decided to slash borrowing rates for the first time in four years.
The US Federal Reserve in their meeting held yesterday cut its benchmark federal funds rate by 50 basis points to 4.75%-5%. This put an end to the consistent rate of hiking that has dominated the market since last year.
The Apex Bank expressed confidence in achieving an inflation rate of nearly 2% and that its employment and inflation objectives are now facing balanced risk.
Their intentions were communicated in a press release on September 18.
“Recent indicators suggest that economic activity has continued to expand at a solid pace. Job gains have slowed, and the unemployment rate has moved up but remains low.
Inflation has made further progress toward the Committee’s 2 percent objective but remains somewhat elevated. The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run.
The Committee has gained greater confidence that inflation is moving sustainably toward 2 percent, and judges that the risks to achieving its employment and inflation goals are roughly in balance.
The economic outlook is uncertain, and the Committee is attentive to the risks to both sides of its dual mandate.
In light of the progress on inflation and the balance of risks, the Committee decided to lower the target range for the federal funds rate by 1/2 percentage point to 4–3/4 to 5 percent.
In considering additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks.
The Committee will continue reducing its holdings of Treasury securities, agency debt, and agency mortgagebacked securities.
The Committee is strongly committed to supporting maximum employment and returning inflation to its 2 percent objective. “ The Press release read.
Bitcoin Price surges in response to Fed rate cuts
Crypto analysts believe that the interest rate reductions were already priced in the price of big crypto assets like Bitcoin. However, the crypto asset reacted strongly to the FOMC decision to cut borrowing rates surging from $57,600 to $60,000.
At the time of writing Bitcoin is exchanging hands for $62,089 surging by 2.8% in the last 24 hours. Before the price surge by Bitcoin the crypto asset experienced little volatility with its price fluctuating furiously before finally surging.
Following the Surge in price by Bitcoin yesterday the crypto asset’s daily trading volume jumped by 17% hovering around $48.2 billion while its market cap stood at $1.22 trillion.
The crypto asset witnessed a $75 million daily liquidation with a bulk of that coming from short positions.
What To Know
- The FOMC meeting held yesterday was the first in 2 months and it resulted in the slashing of borrowing rates by 50 basis points.
- The FOMC meeting is carried out by the US Federal Reserve
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