U.S. Federal Reserve Cuts Rates: What It Means for Bitcoin and Stocks
TL;DR
- The U.S. Federal Reserve cut its benchmark fed funds rate by 50 basis points to 4.75%-5%, the first reduction in four years, reflecting confidence in a sustainable inflation path.
- Following the announcement, $BTC briefly surged to $61,000, while U.S. equities and gold prices also saw positive movements.
The U.S. Federal Reserve has made a notable decision by cutting its benchmark fed funds rate by 50 basis points, marking the first reduction in four years. This move indicates the Committee's confidence that inflation is moving towards the 2% target, despite uncertainties in the economic outlook.
In the immediate aftermath, $BTC's price surged by 1.2%, reaching $61,000 before settling down. U.S. equities reacted positively, with the Nasdaq rising by 0.8% and the S&P 500 gaining 0.6%. Gold prices also soared, hitting a new all-time high above $2,600.
Market expectations lean towards further rate cuts, with projections suggesting a median benchmark rate of 4.4% by year-end. This shift in outlook follows indications from Chairman Jerome Powell that adjustments were necessary due to cooling inflation and rising unemployment. Traders had anticipated either a 25 or 50 basis point cut, contributing to a volatile trading session.
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