Bitcoin
Bitcoin Price Jumps Amid FOMC Rate Cut Decision
Bitcoin (BTC) reacted to the Federal Open Market Committee (FOMC) meeting on Wednesday, which showed policymakers resorted to a 50 (0.50%) basis points (bps) interest rate cut for September.
This decision marks the beginning of an easing cycle, with more rate cuts to come in 2024.
FOMC Cuts Interest Rates, Bitcoin Jumps Over $60,000
The Federal Reserve has cut interest rates by 50 basis points, the first reduction since early 2020. Financial markets, including crypto investors, had been expecting this move as policymakers aim to control inflation while promoting job growth.
This rate cut comes after the August Consumer Price Index (CPI) showed inflation cooling to 2.5%, down from 2.9% in July. A weaker jobs market and easing inflation have pushed the Fed to lower borrowing costs, hoping to keep the economy steady.
“I think those rate cuts are going to happen faster than we predict. Why? The labor markets and economy are getting worse at an accelerated pace,” analyst Michael van de Poppe shared ahead of the release.
Read more: How to Protect Yourself From Inflation Using Cryptocurrency
Despite the rate cut, the Federal Reserve remains cautious about inflation risks and stands ready to adjust its policies as needed to maintain market stability. This decision is significant because it directly impacts the broader economy, influencing both families and businesses across the US
Higher interest rates typically make borrowing more expensive, whereas lower rates ease access to loans, stimulating spending and investment. This increased liquidity can benefit riskier assets like Bitcoin and stocks, which often see gains when borrowing costs drop.
Historically, interest rate cuts have boosted assets like Bitcoin. For example, following the Fed’s March 2020 rate cut, Bitcoin surged as investors sought to capitalize on lower borrowing costs amid the economic uncertainty triggered by the pandemic.
Read more: How To Buy Bitcoin (BTC) and Everything You Need To Know
BeInCrypto data shows BTC is trading for $60,730 as of this writing.
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