- The US Central Bank raised interest rates at record pace this year.
- Fed Chair Jay Powell has given positive signals regarding interest rate hikes.
- BTC price reacted to the Chair’s announcement.
The Federal Reserve (Fed) Chairman Jerome Powell, said in the eighth and concluding meeting of 2022, that the Federal Reserve is more likely to increase the Federal Funds Rate (or simply the interest rate) by 50 basis points, or 0.5% of a percentage point.
In a speech at the Brookings Institution in Washington, Powell said, “The time for moderating the pace of rate increases may come as soon as the December meeting.”
“Given our progress in tightening policy, the timing of that moderation is far less significant than the questions of how much further we will need to raise rates to control inflation, and the length of time it will be necessary to hold policy at a restrictive level,” he added.
Last month, the Federal Reserves announced a hike in interest rates by 75 basis points. In a bid to slow the economy, the central bank raised its interest rate to reduce liquidity in financial markets in order to cope with a soaring inflation rate.
The chair stated that that interest rate hikes, are “slowing down at this point is a good way to balance the risks.” Also, the recently released Fed’s Beige Book regional economic survey, noted “flat or up slightly since the previous report, down from the modest average pace of growth in the prior.”
Powell emphasized, “It will take substantially more evidence to give comfort that inflation is actually declining. The truth is that the path ahead for inflation remains highly uncertain.”
He further added, “despite the tighter policy and slower growth over the past year, we have not seen clear progress on slowing inflation.”
“the ultimate level of rates will need to be somewhat higher than thought at the time of the September meeting in the summary of economic projections,” he noted.
Tomorrow, the Labor department will publish non-farm payroll reports, with the consumer price index (CPI). It is assumed to be the last major economic data the Federal Open Market (FOMC) will examine prior to this year’s last meeting on December 13-14, 2022.
According to an Economic survey by Bloomberg, nearly 200,000 jobs were added in November, which is the lowest in a timespan of two years.
The Fed chair noted that, “excess retirements might now account for more than 2 million of the 3 1/2 million shortfall in the labor force.”
The Price of Bitcoin (BTC) rose marginally, after his announcement from $17,197.5, at the time of writing.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.