Bitcoin's price remained relatively stable following the U.S. Federal Reserve's decision to maintain current interest rates.
Bitcoin's price remained relatively stable following the U.S. Federal Reserve's decision to maintain current interest rates. The Federal Open Market Committee (FOMC) held the benchmark federal funds rate steady at a range of 5.25% to 5.50%, in line with analysts' expectations.
In its statement, the Federal Reserve highlighted ongoing economic growth and robust job gains. "Recent indicators suggest that economic activity has continued to expand at a solid pace," the central bank noted. "Job gains have remained strong, and the unemployment rate has remained low. Inflation has eased over the past year but remains elevated. In recent months, there has been modest further progress toward the Committee's 2 percent inflation objective."
The Fed reiterated its dual mandate of achieving maximum employment and stable inflation. "The Committee judges that the risks to achieving its employment and inflation goals have moved toward better balance over the past year. The economic outlook is uncertain, and the Committee remains highly attentive to inflation risks," the statement read.
James Butterfill, Head of Research at CoinShares, expressed concern over the Fed's limited options in the face of potential stagflation—a scenario of stagnant economic growth combined with high inflation. "The Fed is in a precarious situation with stagflation looming over the macroeconomic environment," Butterfill told The Block. "This could lead to financial instability and severely impact banks, similar to past crises."
The Fed's decision to keep rates steady had a noticeable impact on equity markets. Major stock indices held steady and even rallied during mid-day trading on Wednesday. The S&P 500 gained 1%, the Nasdaq Composite rose by 1.7%, and the Dow Jones Industrial Average was up slightly less than 1%. Bitcoin was trading around $69,159.19, reflecting a 3.47% increase over the past day.
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