Yesterday’s Federal Reserve (FED) FOMC meeting turned out to be more hawkish than many Bitcoin investors and the financial market expected. As anticipated, the FED raised interest rates by 0.5 percentage points on Wednesday. This brings the interest rate to a range of 4.25-4.5%, the highest level in 15 years.
However, overall, central bankers expect the rate to be higher next year than initially expected, which may have been the biggest influencing factor in yesterday’s bitcoin and crypto market reaction.
FED Is More Hawkish Than Expected
The revision to the FOMC dot plot showed that, on average, the monetary policymakers expect to raise the rate up to 5.1% in 2023 before lowering it to 4.1% in 2024. That means the Fed will have to raise the fed funds rate another 0.75 bps in 2023. Whether that will happen in three steps or less is something Powell declined to commit to on Wednesday.
“More important than speed is the question of how high interest rates will ultimately have to ris
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