BREAKING: Federal Reserve Unveils Yet Another Interest Rate Hike
Bitcoin

BREAKING: Federal Reserve Unveils Yet Another Interest Rate Hike

Chairman Jerome Powell has once again indicated that further hikes will be required to bring heightened levels of inflation under control.

BREAKING: Federal Reserve Unveils Yet Another Interest Rate Hike

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The Federal Reserve has increased its base interest rate by 0.25 percentage points, despite the turmoil rocking the U.S. banking sector.

This has now taken the U.S. central bank's interest rate to its highest level in 2007, with Chairman Jerome Powell once again indicating that further hikes will be required to bring heightened levels of inflation under control.

Before three banks went down — Silvergate, Silicon Valley Bank and Signature — economists had been toying with a much more substantial 0.5 percentage point rise.

Powell also revealed that economists had considered pausing their campaign of interest rate rises in light of the crisis — but despite expectations in some corners of the market, cuts to the base rate are unlikely to take place this year.

Bitcoin was trading at fresh nine-month highs in the hours before the Fed's announcement. In the minutes after the hike was confirmed, the world's biggest cryptocurrency remained at $28,500.

But a sharp pullback soon followed — and within two hours, Bitcoin had fallen 4% and was trading at $27,000.

The Fed isn't alone, with the European Central Bank unveiling a 0.5 percentage point rise last week.

And the Bank of England has now followed suit after inflation figures for February were much higher than expected.

The year-on-year rise of 10.4% hasn't been seen for 45 years, and was driven by a substantial uptick in food prices.

Low fat milk is now 42% more expensive than it was a year ago, with olive oil up 41% and sugar by 38%.

Officials in London confirmed that they too were opting for a 0.25 percentage point rise — the 11th time in a row that rates have gone up.

However, the Bank of England no longer believes that the U.K. will suffer a technical recession next year, where economic activity contracts for two consecutive quarters.

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