- The U.S. Federal Reserve (Fed) has announced its eagerly awaited interest rate decision today. The Fed has decided to keep the interest rate at 5.50%.
- The annual PCE rate, the inflation measurement preferred by the Fed, increased from 3% in June to 3.3% in July. The labor market cooled off, and the unemployment rate rose.
- Investors will now be closely watching the statements of Fed Chairman Jerome Powell in his press conference at 21:30. Powell’s remarks during this conference could set expectations for the November and December meetings.
The U.S. Federal Reserve interest rate decision, eagerly awaited by global markets, has been announced today, causing volatile movements in the markets, with investors awaiting Chairman Powell’s statements!
The U.S. Federal Reserve Announces the Interest Rate Decision
The U.S. Federal Reserve (Fed) has announced its eagerly awaited interest rate decision today. The Fed has decided to keep the interest rate at 5.50%. Expectations were already leaning towards the Fed keeping interest rates steady. Despite inflation exceeding targets, FOMC participants chose to pause.
#FED LEAVES RATES UNCHANGED AT 5.25-5.5%
— COINOTAG NEWS (@coinotagen) September 20, 2023
Major Wall Street firms were expecting a “pause,” but rising oil prices pose a renewed threat to inflation. JPMorgan, Goldman Sachs, Morgan Stanley, Barclays, BNP, BMO, Bloomberg, Nomura, RBC, and Wells Fargo had all predicted that interest rates would remain unchanged. Raymond James and Mizuho, on the other hand, were anticipating a 25-basis-point increase.
The annual PCE rate, the inflation measurement preferred by the Fed, increased from 3% in June to 3.3% in July. The labor market cooled off, and the unemployment rate rose. On September 13, it was announced that the annual inflation rate for August was 3.7%, surpassing the expected 3.6%.
Investors will now closely follow the statements of Fed Chairman Jerome Powell in his press conference at 21:30. Signals given by the Fed Chairman in these statements could set expectations for the November and December meetings. Any signal of a possible interest rate hike in November or December could put pressure on risky assets like Bitcoin for some time.
How Did Bitcoin, the Dollar, and Gold React?
Sudden market movements were observed following the interest rate decision. Bitcoin was trading at $27,195 before the decision, but it showed a 0.40% drop to $27,079 after the announcement. Currently, BTC is trading at $27,168.
The U.S. Dollar Index (DXY) was at 104.755 before the decision and increased by 0.30% to 105.094 after the announcement. Meanwhile, gold was trading at $1,946 before the decision and saw a 0.30% drop to $1,940 after the announcement.
