On Wednesday, March 22, the U.S. Federal Reserve (the Fed) raised the target range of the federal funds rate by 25 basis points, to 4.75-5%.
The decision matched market expectations. According to the Fed, inflation in the United States remains elevated and further monetary tightening is warranted.
“The Committee aims to achieve maximum employment and inflation at 2% in the long run,” the press release says.
On March 14, the BLS published a consumer price index report. The index value overall matched forecasts— the February rise was 0.4% month-on-month and 6% year-on-year.
The figures pointed to the persistence of price growth in the services components of the index. They were mentioned by Fed Chair Jerome Powell as an obstacle to a broad decline in inflation in 2023.
The cryptocurrency market reacted to the Fed decision with restraint. According to CoinGecko, prices of the largest by market capitalization digital assets did not show significant movement.
Ahead of the release, Bitcoin tested above $28,700. In the first minutes after the announcement, the price briefly rose above $28,800, but subsequently retraced to around $28,400.
At the time of writing, total market capitalization was up 0.6%.
In March, Powell, during a hearing before Congress, stated that there is a high probability of further tightening of monetary policy. However the collapse of U.S. banking institutions and the Swiss investment bank Credit Suisse forced investors to expect softer steps from the Fed.
Earlier, Glassnode analysts noted a weekly rise of Bitcoin by 35.8% thanks to emergency measures by leading central banks after the loss of trust in financial institutions. regard Bitcoin as a safe asset.
Back in February, the Fed raised the target range by 25 basis points to 4.50-4.75%.
The prices of the leading cryptocurrency rose above $23,000.