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<p>The post <a rel="noopener noreferrer nofollow" href="https://coinpedia.org/news/fed-raises-rates-by-25-bps-hints-at-further-increase-in-september/">Fed Raises Rates by 25 bps; Hints at Further Increase in September</a> appeared first on <a rel="noopener noreferrer nofollow" href="https://coinpedia.org">Coinpedia Fintech News</a></p> 
<p>The Federal Reserve, America’s central banking system, dropped a financial thunderbolt on Wednesday, pushing interest rates to a whopping 5.25% – 5.5%. But even as Wall Street shudders and Bitcoin shows signs of resilience, Jerome Powell, Chair of the Fed, hinted at another rate increase in the forthcoming September Federal Open Market Committee (FOMC) meeting.</p> 
<figure class="wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio"> 
 <div class="wp-block-embed__wrapper"> <iframe title="FOMC Press Conference, July 26, 2023" width="1220" height="686" src="https://www.youtube.com/embed/t1RDj1CMnLA?feature=oembed" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen></iframe> 
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<h2 id="the-highest-interest-rate-hike-in-22-years-a-monetary-tightrope-walk" data-name="the-highest-interest-rate-hike-in-22-years-a-monetary-tightrope-walk" class="wp-block-heading"><strong>The Highest Interest Rate Hike in 22 Years: A Monetary Tightrope Walk</strong></h2> 
<p>At the end of the FOMC meeting, the committee <a href="https://www.federalreserve.gov/monetarypolicy/files/monetary20230726a1.pdf" rel="noopener noreferrer nofollow">announced</a> an interest rate increase of 25 basis points, the highest level since 2001. The decision, while shaking the economic landscape, was widely anticipated by the financial markets and thus did not induce much volatility.</p> 
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   <p lang="en" dir="ltr">Read Chair Powell's full opening statement from the <a href="https://twitter.com/hashtag/FOMC?src=hash&amp;ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow">#FOMC</a> press conference (PDF): <a href="https://t.co/k9Vg3sXWgp" rel="noopener noreferrer nofollow">https://t.co/k9Vg3sXWgp</a> <a href="https://t.co/KM4NMQh0uO" rel="noopener noreferrer nofollow">pic.twitter.com/KM4NMQh0uO</a></p>— Federal Reserve (@federalreserve) <a href="https://twitter.com/federalreserve/status/1684276227685638148?ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow">July 26, 2023</a> 
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<p>The Fed’s move aims to achieve maximum employment and curb inflation at 2 percent over the long run. Inflation, however, continues to be stubbornly high, a point reiterated by the FOMC. Powell acknowledged that the full effects of the current monetary policy tightening have yet to trickle down into the economy, pointing towards a cautious path forward.</p> 
<h2 id="bitcoin-holds-its-ground-but-whats-next" data-name="bitcoin-holds-its-ground-but-whats-next" class="wp-block-heading"><strong>Bitcoin Holds Its Ground, But What’s Next?</strong></h2> 
<p>Although Bitcoin showed a slight dip initially following the news of the rate hike, the cryptocurrency soon rallied. This resilience in the face of a major economic decision further cements Bitcoin’s unique place in the financial ecosystem.</p> 
<p>With the rate hike underpinning market expectations, focus has shifted towards the future moves of the central bank. The question now is – what does Powell’s hint of another rate increase mean for Bitcoin and other financial markets?</p> 
<h2 id="an-eye-on-september-another-rate-hike-brewing" data-name="an-eye-on-september-another-rate-hike-brewing" class="wp-block-heading"><strong>An Eye on September: Another Rate Hike Brewing?</strong></h2> 
<p>In a post-meeting press conference, Powell kept markets on tenterhooks by suggesting another interest rate hike may be looming. “The intermeeting data came broadly in line with expectations,” he stated. However, he warned that if incoming economic data remained robust, the FOMC might be forced to raise interest rates again in the September 2023 meeting.</p> 
<p>Interestingly, the Fed Chair pointed out that the central bank wouldn’t solely rely on inflation readings to determine future interest rates. The FOMC would consider a wide range of data, keeping a keen eye on inflation trends.</p> 
<p>While the US Fed’s aggressive moves continue to keep analysts and market participants on their toes, there are whispers of a potential rate cut in the new year. If the rate hike pause materializes from the next FOMC meeting, the January 2024 meeting could likely see a lowering of rates for the first time in more than two years.</p>

Fed Raises Rates by 25 bps; Hints at Further Increase in September

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