The Fed raised the range of the key rate by 50 bps to 0.75-1% per annum at the end of its meeting on May 4-5. At a press conference, Fed Chairman Jerome Powell ruled out an increase in the policy tightening step in the future.
Before the meeting, the futures market was 94.3% expecting that on June 15 the Fed would raise the rate by the maximum of 75 bp since 1994. The rate has now fallen to 83.1%.
Powell explained that the committee was not actively considering this scenario because of expectations that inflation would stabilize after it jumped to a 40-year high of 8.5 percent.
“If inflation has peaked, then the Fed has some room for patience. A less aggressive policy would be positive for digital assets”Joe Orsini, director of research at Eaglebrook Advisors, told CNBC
Powell has repeatedly dismissed the possibility of a recession in the economy and said he is ready to continue fighting inflation.
On May 4, the Fed also decided to begin cutting the balance sheet. In June, the monthly rate will be $47.5 billion and will accelerate to $95 billion over the next three months.
Amid Powell’s comments, the price of the first Cryptocurrency added more than $1,000 within half an hour, momentarily surpassing the $40,000 level. Over the past 24 hours, the growth rate has weakened to 1.2%. At the time of writing, the asset is trading near $39,500.
Bitcoin’s rebound coincided with gains on Wall Street. The S&P 500 Index ended trading up 2.99% and the Nasdaq Composite was up 3.19%. Gold rose 0.72%. The U.S. dollar depreciated 0.91% against a basket of currencies.
Co-founder of BitMEX exchange Arthur Hayes called the probable fall of the first Cryptocurrency to $30,000 by the end of the second quarter of 2022 due to the decline of Nasdaq index.
Earlier, analysts at Glassnode said that the process of redistribution of coins from speculative investors to hodlers is over, and allowed Bitcoin to pass the bottom