Digital Assets: Bitcoin Jumps As Fed Accelerates ‘Taper,’ Mulls Three Rate Hikes In 2022
The Fed Meeting: Pedal to the metal on tapering and aggressive rate hikes down the line to counter record inflation
At the conclusion of its two-day confabulations, the Fed said it will step up the rate of reduction (‘taper’) in its bond purchases. Further, projections showed that the central bank could hike interest rates as many as three times in 2022, twice in the year following, and again twice in 2024. However, at the latest meeting, the Fed kept rates on hold. The FOMC’s decisions were approved by members unanimously. (CNBC)
“Supply and demand imbalances related to the pandemic and the reopening of the economy have continued to contribute to elevated levels of inflation,” said a post-meeting statement from the Fed. Evidently, the term ‘transitory’, previously used to describe inflation, has been dropped. Instead, the central bank revised higher its outlook on inflation for 2021, to 5.3% from 4.2% for all items and to 4.4% from 3.7% excluding food and energy.
The statement also noted solid job gains in recent months and a substantial decline in the employment rate.
Bitcoin moves up sharply
In what appears to be a relief rally amidst a “sell-the rumor-buy-the-fact” phenomenon, bitcoin surged higher after the Fed pronouncements.
At the time of writing, bitcoin is trading at 49,110.61, up over 4% over 24 hours, and off a low of $46,584.37 touched during that period.
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