On March 22, the Federal Reserve announced its ninth quarter percentage points rate hike in March 2022 in its ongoing fight against inflation.
Chairman Jerome Powell cautioned about the recent banking crisis and hinted that the hikes might be coming to an end. The Federal Open Market Committee stated that future rate hikes are dependent on incoming data, and the committee anticipates additional policy firming to reach a stance of monetary policy that will return inflation to 2 percent over time.
Although Powell suggested that the Fed may be considering the end of the rate hike, he stressed that the fight against inflation is ongoing.
Powell emphasized the importance of restoring price stability, stating that it will bring inflation down to 2 percent over time. The recent developments in the US banking system could lead to tighter credit conditions, but Powell did not expect rate cuts any time soon.
The rate hike impacted Bitcoin and the cryptocurrency market, as the markets did not react well to the continued monetary tightening. The top three Wall Street indices dropped 1.6 percent, and Bitcoin and other altcoins experienced selling pressure. Bitcoin dropped by over 2 percent to $27,742, following the Nasdaq 100’s similar drop.
Despite the selling pressure in the crypto market, Bitcoin has had a strong rally this year and is viewed as a trusted investment destination amid the traditional banking sector’s turmoil. The Fed’s fight against inflation is ongoing, and its impact on the crypto market remains to be seen.
