The interest rate decision that crypto investors have been eagerly awaiting has finally been announced. Why not as excited as before? Because the interest rate decision was already largely confirmed. However, the data that comes in can also lead to a surprising decision. So what are the details of the official statement that the Fed just made with the interest rate decision?
Last Minute Interest Rate Decision by the Fed
The Fed announced the interest rate decision about 1 minute ago. Powell and his team had already paused interest rate hikes for a while. However, critical figures such as employment, wage increases, and job openings have not met the expected numbers. In addition, investors are not very hopeful about the data that will come tomorrow and on Friday.
What does the Fed want? The Fed wants the economy to stop growing above the trend and for wage increases to slow down while employment declines. However, the US economy is not going in the direction the Fed wants at the desired pace. While the Fed continues to shrink its balance sheet, it still continues to tighten despite pausing interest rate hikes. Moreover, the tightening of access to credit also helps the Fed squeeze the economy through different channels instead of raising interest rates.
So what happened today? The Fed did not raise interest rates, and here are the details;
“The US banking system is sound and resilient. Tighter financial and credit conditions for households and businesses are likely to exert pressure on economic activity, hiring, and inflation. The size of these effects remains uncertain. The Committee will continue to be extremely vigilant against inflation risks. The Committee aims to achieve maximum employment and inflation of 2 percent in the long run. In addition, as previously announced in its plans, the Committee will continue to reduce Treasury securities and securities holdings. The Committee will continue to monitor the effects of incoming information on the economic outlook as it assesses the appropriate stance of monetary policy. The Committee’s assessments will take into account a wide range of information, including labor market conditions, inflation pressures and expectations, and financial and international developments.”
Powell will speak at 21:30, and his statements and tone are quite important.
