Adhering to the market expectation, the Federal Open Market Committee (FOMC) decided in the September 20, 2023 meeting to keep the benchmark federal funds rate steady at the current target rate of 5.25-5.50%. The committee said it intends to prioritize balancing the employment figures along with achieving the 2% inflation target.
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FOMC Keeps Interest Rate Steady
The Fed officials said inflation remains elevated while the unemployment rate has remained low. Going further, the committee will assess additional information and its implications for monetary policy, in deciding future rates, it added. Reiterating its previous stance, the FOMC said it is committed to returning inflation to its 2 percent target. The FOMC statement said,
“The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. In support of these goals, the Committee decided to maintain the target range for the federal funds rate at 5-1/4 to 5-1/2 percent.”
John Authers, senior editor at Bloomberg, said the market participants have so far considered this as a hawkish pause from the FOMC. Meanwhile, the Bitcoin price remained flat in its initial reaction to the Fed rate announcement. Jerome H. Powell, the Chair of the US Federal Reserve, will deliver his post FOMC speech in a live press conference, where he may spill out the Fed’s outlook on inflation target for upcoming meetings.
WATCH LIVE TODAY: Press conference with #FOMC Chair Powell at 2:30 p.m. ET: https://t.co/1uJrua5qsHhttps://t.co/FJa6TbkDMt pic.twitter.com/V7gINNUKP1
— Federal Reserve (@federalreserve) September 20, 2023
Hawkish Pause Means Rate Cuts Delayed Further?
The FOMC statement indicated a hint of hawkish stance taken by the Fed officials, with reference to considering additional policy firming if appropriate to reach the inflation target. The committee said it will consider the cumulative tightening of monetary policy so far, its impact on the economic activity and incoming inflation data in deciding further tightening of policy. More importantly, does this mean the possibility of rate cuts has further extended sometime in the year 2024?
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Source: https://coingape.com/us-fed-fomc-minutes-bitcoin-price-crypto-news/
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