As the market expected, the FED increased interest rates by 25 basis points and interest rates in the USA were increased to the 5.25-5.5% band.
Bitcoin followed a sideways course after the interest rate hike, which was already priced in by the market. However, Powell’s statements may have an impact on the BTC price.
In the statements published by the authorities at the same time as the interest rate decision, it was reported that inflation remained high.
Now, Fed chairman Jerome Powell is making a press statement. The post will be updated as Powell continues to speak. Here are the highlights of the Fed’s speech:
- The FOMC will take a data-driven approach to future increments.
- The full effects of tightening have not yet been felt.
- The housing sector recovered but remained well below 2022 levels.
- Growth in consumer spending slowed compared to the beginning of the year.
- The labor market remains very tight.
- The FOMC is determined to increase inflation to 2%.
- We have a long way to go to get back to 2%.
- Nominal wage growth showed some signs of easing.
- Inflation has reached moderate levels compared to last year, but we still have a long way to go.
- The high inflation rate poses significant challenges.
- We will take the decisions at the meeting.
- Lowering inflation will likely mean below-trend growth.
- This will likely require a period of below-trend growth and some softening in the labor market.
- We have not made any decisions regarding future meetings.
- The June CPI data was pleasing, but it was only a one-month report.
- If the data shows that more rate hikes are needed, we will make that decision.
- Question: Will there be a rate hike in November? Answer: We have not made any decision on this issue. We make every decision from meeting to meeting. In this regard, we have to decide what the rate of increase in interest rates should be.
- If the data require this, it is possible to raise interest rates in September.
- We will be careful not to get too many signals from a single data on inflation.
- We’ll see if the signal from the June CPI repeats.
- The September move depends on the data; We do not have data yet.
- We will need to keep the policy at restrictive levels for a while longer.
- Core inflation is still quite high.
- We need to see inflation come down permanently.
- Interest rates need to be kept higher ‘for a while’.
- I do not believe the policy is restrictive long enough to keep inflation at the target.
- Ready to tighten further if appropriate.
- There is no environment where the FOMC should provide much forward direction.
- No one should doubt that we will use the tools at our disposal to bring inflation to the target.
- I would say that the policy is even more restrictive after today’s decision.
- We have come a long way, we are determined to return inflation to the target.
- I don’t think there will be any rate cuts this year.
- Don’t see inflation back at 2% until about 2025
This latest rate hike could be the last in this tightening cycle, according to the majority of 106 economists polled by Reuters.
However, Wells Fargo’s Tim Quinlan and Shannon Seery said the US is likely to see a 1.7% year-on-year GDP growth in Q2.
*Not investment advice.