Fed Holds Key Rate; Bitcoin Reacts Tepidly

Fed keeps rate at 5.25%–5.50%.

On November 1, the U.S. Federal Reserve (the Fed) kept the target range for the federal funds rate at 5.25–5.50%.

The decision met market expectations. According to the Fed, inflation in the United States remains high, the unemployment rate is low, and economic activity continues to grow at a brisk pace.

“The U.S. banking system is sound and resilient. Tighter financial and credit conditions for households and businesses are likely to exert negative pressure on economic activity, employment and inflation. The extent of this impact remains uncertain,” the press release says.

The Fed aims to achieve maximum employment and inflation at 2% in the long run.

On October 12, the U.S. Bureau of Labor Statistics published a report on consumer prices. The index value exceeded market expectations — year-over-year growth remained at 3.7%, and month-over-month declined from 0.6% to 0.4%.

The cryptocurrency market hardly reacted to the news. According to CoinGecko, the prices of the largest-cap digital assets showed no significant movement.

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Bitcoin prices did not show significant movement. As of writing, the aggregate market capitalization of the cryptocurrency market remained above $1.3 trillion.

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In February 2023, the key rate raised to 4.5-4.75% per year. In March the rate reached 4.75-5%, and in May — 5-5.25%.

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In June, the Fed for the first time since March 2022 maintained the target range at 5–5.25%.

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The price of Bitcoin fell below $26,000.

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In July the rate rose to 5.25-5.5%, but digital gold prices reacted only modestly to the changes. In September the rate was kept at the previous level.

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