The U.S. Federal Reserve, in collaboration with the Federal Open Market Committee (FOMC), <a href="https://www.federalreserve.gov/newsevents/pressreleases/monetary20230503a.htm" rel="nofollow noopener" target="_blank">announced</a> a 25 basis points (bps) increase in the federal funds rate on Wednesday, as anticipated by the market. This marks the tenth consecutive interest rate hike since March 2022.



<h2 id="fomc-open-to-additional-policy-firming">FOMC open to additional policy firming</h2>



The central bank raised the benchmark interest rate, citing modest economic expansion in the first quarter. However, the announcement acknowledged low unemployment but emphasized the persistence of elevated inflation. The FOMC stressed the &#8220;sound and resilient&#8221; nature of the U.S. banking system.



The continuous rate hikes demonstrate the Fed&#8217;s commitment to reducing inflation. The FOMC aims to bring the inflation rate down to the 2% range. &#8220;In support of these goals, the committee decided to raise the target range for the federal funds rate to 5 to 5-1/4 percent,&#8221; the FOMC announced.



Following the news, major U.S. benchmark stock indexes, precious metals, and crypto markets experienced a surge. Investors eagerly awaited Fed Chairman Jerome Powell&#8217;s comments on future rate adjustments. Speculation suggests that the Fed may halt rate hikes for the remainder of the year.



Although some market analysts anticipate a reduction in the benchmark bank rate, the FOMC indicated that &#8220;additional policy firming may be appropriate to return inflation to 2 percent over time.&#8221; The FOMC statement did not clarify whether the rate would remain unchanged at the June meeting.



During the press conference, Powell <a href="https://www.cnbc.com/2023/05/03/live-updates-fed-decision-may-2023.html" rel="nofollow noopener" target="_blank">discussed</a> the U.S. debt limit and expressed optimism for a resolution. Consistent with prior statements, the Fed maintains that failure to raise the debt limit could result in financial disruption. Regarding the Fed&#8217;s next steps, Powell assured that the central bank is &#8220;prepared to do more if greater monetary policy is warranted.&#8221;

Fed increases interest rate by 25bps, asserts ‘US banking system is sound and resilient’

Table of Contents

Cryptopolitan_News

Andre artikler udgivet 3. maj 2023

FTX Seeks to Recover $3.9B in Fiat and Crypto from Genesis: Report

FTX Is Seeking to Reclaim $3.9B In Fiat and Crypto From Genesis

UK government cracks down on crypto cold calls to combat fraud

Polkadot price analysis: DOT price moves down to $5.69 as bearish pressure prevails

Shido is coming on Binance Live!

Banking Bunkum Continues as Half of US Banks Could Be Insolven

Join our free newsletter for daily crypto updates!