Fed officials flag a modest rate-hike path as cryptocurrencies reclaim Tuesday’s highs

The median projection for the federal funds rate at the end of 2023 stood at 1%, and for 2024 at just 1.8%; votes for and against the first rate hike in 2022 were evenly split. Such data содержатся in the Fed’s updated projections from the Federal Open Market Committee members.

Previous estimates in June envisaged the first increase in the federal funds rate in 2023. At the same time, the market could not rule out that its size in 2024 could be 2.5% (at that time the Fed had provided projections only for the “long-run”).

Following the September 22 meeting, the Fed, as the market expected, left the target for the federal funds rate at 0-0.25% per year. In line with expectations, policymakers signaled that tapering the asset purchases would be “appropriate.” In September its size was kept at $120 billion per month ($80 billion on US Treasuries, $40 billion — on agency mortgage-backed securities).

That is because the economy has made progress toward the goals associated with tapering asset purchases.

The futures market for the federal funds rate prices in more than a 60% probability of the first Fed rate hike by December 2022. Before the meeting it was estimated at 55%, a week earlier — at 52%.

Galaxy Digital founder Mike Novogratz expressed confidence regarding near-term prospects for the crypto market, as Bitcoin has not fallen below $40 000 and Ethereum below $2,800.

On Tuesday, Bitcoin prices briefly fell below the level he set. Ethereum also declined below $2,800. After the Fed meeting they remain above those levels.

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