Bitcoin price surged immediately after the US Federal Reserve's decision to cut interest rates by 50 basis points on Wednesday.
The Federal Open Market Committee (FOMC) did what many economists and traders expected, cutting the federal funds rate to a range of 4.75% to 5.00%.
âRecent indicators suggest that economic activity has continued to expand at a good pace. Job gains have slowed, and the unemployment rate has risen but remains low. Inflation has made further progress toward the Committeeâs 2 percent objective but remains moderately elevated,â the committee said in a statement. âThe committee has gained greater confidence that inflation is moving sustainably toward 2 percent, and it judges that risks to achieving the employment and inflation objectives are roughly balanced.â
Regarding the possibility of further rate cuts, the committee said: "When considering any further adjustments to the target range for the interest rate, the committee will carefully assess incoming data, the economic outlook, and risks."
The statement indicated that the Federal Reserve will continue to reduce its holdings of Treasury securities and mortgage-backed debt.
Federal Reserve Chairman Jerome Powell is scheduled to hold a press conference at 2:30 p.m. ET.
Expect short-term market volatility
QCP Capital analysts expect todayâs Fed decision to have a significant impact on financial markets in the medium to long term. They expect high market volatility in the short term following the Fedâs rate cut decision.
âWe are confident that volatility will be high in the days following the meeting as traders reposition their positions in the coming weeks, and this regime change could signal the beginning of strong macroeconomic trends,â the analysts said.
Despite anticipating potential short-term price volatility and declines, analysts advised investors to focus on long-term opportunities, especially long-term investment strategies that have unlimited upside potential to take advantage of potential large increases in Bitcoin prices.
Stocks rise after interest rate decision
Major US stock indices rose after the Federal Reserveâs decision to cut interest rates. At midday in the US, the S&P 500 was up 0.6%, and the Nasdaq Composite was up 0.78%. The Dow Jones Industrial Average was up 0.5%. The CBOE Volatility Index was up 4.4% to 18.39 points. Gold was up 0.6% over the past 24 hours to $2,586.08 per ounce. Bitcoin was trading around $60,558.51 at the time of publication.
