• Bitcoin jumped above $23,600 as Federal Reserve Chair Jerome Powell indicated the U.S. central bank is seeing signs of waning inflation.
• The FOMC lifted its benchmark interest rate by 25 basis points to a new range of 4.5%-4.75%, and data from the CME Group now shows investors pricing in an 86% chance of another 25 basis point rate hike at the March meeting.
• At his post-meeting press conference, Powell led off in a hawkish fashion, reminding reporters of the destructive nature of inflation and promising the Fed’s commitment to bringing inflation down to the 2% target.
Bitcoin Blasts Through $23.5K
Bitcoin (BTC) jumped above $23,600 following Federal Reserve Chair Jerome Powell’s suggestion that the U.S. central bank is seeing signs of waning inflation.
Fed Rate Hike
The Federal Open Market Committee earlier Wednesday lifted its benchmark interest rate 25 basis points to a new range of 4.5%-4.75%, the highest level in 15 years, as expected by markets. In its policy statement, it said „ongoing increases“ in borrowing costs will be necessary to further cool inflationary pressures seen in recent months due to economic recovery and government stimulus efforts
At his post-meeting press conference, Powell made hawkish comments regarding inflation while also committing to bring it back down to their 2% target rate with continued increases in borrowing costs if needed throughout 2021 and beyond.. Data from CME Group now shows investors pricing in an 86% chance of another 25 basis point rate hike at the FOMC’s March meeting accordingly..
The news sent Bitcoin up over $700 on Wednesday evening as traders reacted positively to Powell’s statements and continued rate hikes from the Fed.. NewEdge Wealth Senior Portfolio Manager Ben Emons discussed bitcoin’s price action following this news from Powell and further emphasized how significant this could be for BTC prices moving forward into 2021..
Overall this news has been positive for Bitcoin with prices breaking through new all time highs after every announcement so far out of 2021.. With increased support behind BTC prices due to increasing confidence among traders and with more potential rate hikes still ahead it looks like BTC could be headed even higher during this bull run for 2021..