Bitcoin Tumbles to $26.9K on Hawkish Remarks by Federal Reserve's Powell
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đ° The Wednesday pause in rate hikes had been overwhelmingly expected by market participants, but Fed members now see much higher interest rates for next year than previously projected.
đ° In a widely anticipated move, the U.S. Federal Reserve on Wednesday held monetary policy steady, leaving the range for its benchmark interest rate at 5.25% to 5.50%.
đ° Fed officials also projected keeping interest rates higher for next year at around 5.1%, a significant jump in expectations compared to 4.3% in the June prediction. They also see stronger economic growth for this year, expecting a 2.1% real GDP increase versus a 1% forecast in June.
đ° "In determining the extent of additional policy firming that may be appropriate to return inflation to 2% over time, the Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments," the Fed statement reads.
đ° Bitcoin's (BTC) price remained flat around $27,200 in the minutes following the central bankâs announcement, but later tumbled some 1% to $26,900 as Fed Chair Jerome Powell said in a press conference that the central bank will do more rate hikes if the economy remains stronger than expected.
đ° Powell also said that the majority of Fed members believe "one more rate hike is more likely than not appropriate" to reach the Fed's goal during the remaining two Federal Open Market Committee (FOMC) meetings. He also acknowledged that the recent trend in inflation is going in the right direction, saying that the last three months' reading were "very, very good."
đ° The FOMCâs next policy meeting is set for the start of November.
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