Fed Maintains Interest Rates, Seeks ‘Greater Confidence’ on Inflation Goal; Bitcoin and Gold Hold Steady

Must Read
Please note: Most, if not all, of the articles published at this website were completed by Chat GPT (chat.openai.com) and/or copied and possibly remixed from other websites or Feedzy or WPeMatico or RSS Aggregrator or WP RSS Aggregrator. No copyright infringement is intended. If there are any copyright issues, please contact: bicycledays@yahoo.com.

On Wednesday, Jan. 31, 2023, the U.S. Federal Reserve opted to maintain the federal funds rate unchanged. The Federal Open Market Committee (FOMC) additionally stated that the committee “does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation” is steadily approaching the 2% mark. As benchmark equity indices experienced declines, the price of bitcoin remained unaffected.

Fed Holds Rate Steady, Aiming for ‘Greater Confidence’ in Inflation Control

The U.S. central bank has resolved to maintain the federal funds rate between 5.25% and 5.5% until the forthcoming FOMC meeting. The Fed observed that recent signs indicate a robust expansion of economic activity. It acknowledged that while job growth has slowed compared to the early part of last year, it continues to be strong, and the unemployment rate has stayed low. Although inflation has moderated over the previous year, it continues to be higher than desired.

“In support of its goals, the committee decided to maintain the target range for the federal funds rate at 5-1/4 to 5-1/2 percent,” the central bank disclosed on Wednesday. “In considering any adjustments to the target range for the federal funds rate, the committee will carefully assess incoming data, the evolving outlook, and the balance of risks.” The Fed added:

The committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent.

The three primary indices tracking market performance in the United States — the Dow Jones Industrial Average, the Standard & Poor’s 500, and the Nasdaq Composite — all registered declines following the announcement. In contrast, bitcoin (BTC) remained steady, holding its value at $43,258 per unit on Wednesday afternoon after the FOMC announcement.

#Powell spoke about “goods inflation” and “housing inflation.” There’s no such thing as either. Prices don’t inflate, they rise as a result of inflation. Economic growth actually pushes prices down. It’s #inflation that pushes them up. All inflation is caused by the #Fed & Govt.

— Peter Schiff (@PeterSchiff) January 31, 2024

Gold and silver also remained stable in the wake of the Fed’s decision on interest rates. Although bitcoin and precious metals markets showed no significant movement, the banking sector experienced turbulence. Shares of New York Community Bancorp (NYSB) plummeted over 40% on Wednesday, impacting a broad spectrum of banking stocks.

During the subsequent press conference, Fed Chair Jerome Powell mentioned that the FOMC requires additional data and “greater confidence” regarding the reduction of inflation. This move positions the central bank to potentially reduce the federal funds rate within this year. “I want to assure the American people we are fully committed to returning inflation to our 2% goal,” Powell informed the media. He added:

The lower inflation readings over the second half of last year are welcome, but we will need to see continuing evidence to build confidence that inflation is moving down sustainably to our goal.

By 3:45 p.m. Eastern Time (ET) on Wednesday, bitcoin’s (BTC) price dropped 2.1% under the $43K threshold to $42,796 per unit. “I will tell you that I don’t think it’s likely that the committee will reach a level of confidence by the time of the March meeting to identify March is the time to do [rate cuts],” Powell told the press. Markets expressed disappointment with Powell’s statement, as there’s widespread anticipation of rate cuts in March 2024.

What do you think about the Fed’s decision to keep rates the same? Share your thoughts and opinions about this subject in the comments section below.

Latest Articles

Mike Tyson joins boxing blockchain project

Boxing legend Mike Tyson has partnered with the blockchain venture for boxers Prepared To Battle. In accordance with a press...

More Articles Like This