December 6, 2022

Bitcoin & Wall Street Plunge As Powell Threatens Interest Rate Hikes At FOMC

2 min read

Bitcoin’s rate went rough throughout an interview following today’s highly expected Federal Open Markets Committee (FOMC) meeting. It fell $1000 as Federal Reserve Chairman Jerome Powell reiterated strategies to raise the federal funds rate in March.

  • In his speech preceding the conference, Powell acknowledged that much of the workforce is not able to report for work, offered current scenarios. Nevertheless, he expects the effects of the Omicron wave to be brief, along with its negative economic effects.
  • The chairman noted that inflation is well above the Federal Reserve’s target rate of 2%, blaming “supply and need imbalances”. Earlier this month, December’s CPI was available in at a record 7%, increasing Bitcoin’s rate.
  • Pointing out a “tight” labor market, Powell concluded that the economy no longer requires “continual financial policy assistance.”
  • As such, plans to raise rates and lower the Fed’s balance sheet in March stay in result.
  • “The Fed will be moving far from a really highly accommodative policy to a significantly less accommodative policy, to a policy that’s not accommodative, in time,” said Powell.
  • Earlier today, BitMEX co-founder Arthur Hayes surmised that the Federal Reserve is bluffing, and can’t actually raise rates without harming the marketplace. Powell disagreed, nevertheless, stating there is lots of space to raise rates.
  • Both the crypto and stock markets fell following the speech. Bitcoin has gone down from over $38,200 at 2:40 pm EST to below $37k at the time of composing.
  • On the other hand, both the NASDAQ and S&P 500 are down 0.5% on the day.

Bitcoin/ USD. Source: TradingView