- Federal Reserve kept interest rates steady for the fourth time this year, as predicted by analysts, and saw signs of easing inflation pressures
- In response to Fed’s unchanged rates, bitcoin price rose 3% to over $42,400 while overall crypto market cap increased to $1.65 trillion
- Major U.S. stock indexes also moved higher following the Fed’s decision to pause rate hikes, seen as reassuring by investors
The Federal Reserve held interest rates steady on Wednesday, leading to gains in bitcoin’s price and optimism in the stock market. This pause in rate hikes was widely expected by analysts and marks the fourth time this year rates have been held at current levels.
Fed Holds Rates Steady
As predicted, the Federal Open Market Committee kept the federal funds rate in the current range of 5.25-5.50%. The Fed noted in a statement that while price pressures have eased recently, inflation remains high. The central bank said tighter financial conditions will likely slow economic growth and hiring.
Bitcoin Price Rises
In response to the Fed’s announcement, bitcoin’s price rose almost 3% to over $42,400 in afternoon trading. The largest cryptocurrency by market value had pulled back recently from a December high above $43,300. The overall crypto market cap increased to $1.65 trillion.
Stocks Also Advance
Major U.S. stock indexes moved higher following the decision to keep rates steady. The tech-heavy Nasdaq gained 0.6%, while the S&P 500 rose 0.6% and the Dow Jones Industrial Average climbed 0.5%. Investors saw the pause in rate hikes as reassuring.
The Federal Reserve’s widely expected decision to keep interest rates unchanged provided a boost to bitcoin’s price and optimism in the stock market on Wednesday. Crypto and equities both advanced as the Fed signaled it is seeing signs of slowing economic growth.