- The Federal Reserve, in its second consecutive meeting on Wednesday, kept interest rates steady and left the central bank’s benchmark lending rate at its highest level in 22 years.
- There wasn’t significant market volatility following the interest rate decision. The CME Fedwatch tool currently prices in a 69% chance of rates staying unchanged for the December 13th interest rate meeting.
- The Committee has decided to maintain the target range for the federal funds rate at 5-1/4 to 5-1/2 percent. The Committee will continue to assess the effects of additional information and their implications for monetary policy.
The U.S. Federal Reserve (FED) has announced the interest rate decision: How is it affecting Bitcoin, Gold, and the Dollar? What comments were made by Committee members? All the details!
FED Announces Critical Interest Rate Decision
The Federal Reserve, in its second consecutive meeting on Wednesday, kept interest rates steady and left the central bank’s benchmark lending rate at its highest level in 22 years. Economists and financial markets were anticipating the Fed’s aggressive interest rate hike campaign to pause after some Fed officials hinted that the continued absorption of high borrowing costs by the robust U.S. economy would slow it down.
[COINOTAG NEWS]
The FED did not make any changes in interest rates.
This news published on COINOTAG PRO 5 seconds ago.
— COINOTAG NEWS (@coinotagen) November 1, 2023
There wasn’t significant market volatility following the interest rate decision. The CME Fedwatch tool currently prices in a 69% chance of rates staying unchanged for the December 13th interest rate meeting. The probability of a 25 basis point interest rate increase is set at 29.3%. In their statement, the Committee stated:
“Recent indicators point to a strong pace of expansion in economic activity in the third quarter. Job gains have moderated but are still strong, and the unemployment rate remains low. Inflation is still elevated.
The U.S. banking system is strong and resilient. Tighter financial and credit conditions for households and businesses are likely to have adverse effects on economic activity, employment, and inflation. The size of these effects remains uncertain. The Committee continues to pay close attention to risks to the inflation outlook.
The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the long term. In support of these goals, the Committee has decided to maintain the target range for the federal funds rate at 5-1/4 to 5-1/2 percent. The Committee will continue to assess the effects of additional information and their implications for monetary policy, while considering the cumulative effects of monetary policy on economic activity and inflation, along with financial and international developments. Additionally, the Committee will continue to reduce its holdings of Treasury securities and agency debt and agency mortgage-backed securities consistent with the previously announced plans. The Committee is highly determined to bring inflation back to the 2 percent target over time.
While evaluating its monetary policy stance, the Committee will continue to monitor the effects on economic outlook. Should risks emerge that could impede the Committee’s objectives, it stands ready to adjust its monetary policy stance appropriately. The Committee’s assessments will take into account a wide range of information, including labor market conditions, inflation pressures and expectations, and financial and international developments.”
How Did Bitcoin, the Dollar, and Gold Prices React?
The price of Bitcoin was trading at $34,510 before the FED’s interest rate decision was announced. Following the announcement, there was no significant volatility, and the price remained relatively stable. Currently, BTC is trading at $34,545.
The Dollar Index (DXY) dropped by 0.14% to 106.819 after the FED’s interest rate decision was announced. The current DXY level is 106.934.
Gold, after the FED’s interest rate decision, increased by 0.22% to $1,982, but it couldn’t maintain that level, and the current price of an ounce of gold is $1,979.
