cryptonews.com
The price of bitcoin (BTC) moved up immediately following the conclusion of a two-day US Federal Reserve (Fed) meeting on Wednesday, with the statement from the meeting saying interest rates will be kept unchanged for now, while the amount of tapering doubled from last month. The Fed signaled that 2022 will see three interest rate hikes.
At 19:10 UTC, BTC traded at USD 49,200, up 3.1% for the past 24 hours and up nearly 3% in the first 10 minutes after the release of the statement.
At the same time, the US S&P 500 stock index responded to the statement from the meeting by trading up 0.4% in a matter of 10 minutes after the statement was released. At the time of writing, the index remains up 0.36% for the day.
“In light of inflation developments and the further improvement in the labor market, the Committee decided to reduce the monthly pace of its net asset purchases by USD 20 billion for Treasury securities and USD 10 billion for agency mortgage-backed securities,” the Fed’s statement said.
Ahead of today’s statement, Chief Investment Officer of Global Fixed Income at asset management firm BlackRock, Rick Rieder, told CNBC: “I think getting out of the easing business is very much overdue.” If asset purchases are ended earlier, the Fed will have the option of raising interest rates, Rieder explained, saying “I think they can hike rates in 2022. I don’t think there’s a rush.”
The Fed’s decision to double tapering follows the central bank’s stated commitment from last month to maintain an “accommodative stance of monetary policy,” while reducing its monthly asset purchases by USD 15bn each month.
Today’s statement thus represents a doubling of the reductions of monthly asset purchases by the Fed.
However, the Fed also added back then that it is “prepared to adjust the pace of purchases” if the economic outlook changes.
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