Key Takeaways
- The US Federal Reserve will keep its interest rates unchanged for now
- Fed Chairman Jerome Powell indicated the Quantitative Easing (QE) program will end in March
- The price of Bitcoin (BTC) tanked following the Powell’s briefing
YEREVAN (CoinChapter.com)- The highly-watched policy meeting of the United States Federal Reserve came to an end. The United States Central Bank has decided to keep its key interest rates unchanged, despite it continuing to be as low as 0%-0.25%.
Briefing on the decisions of The Federal Open Market Committee (FOMC), Fed Chairman Jerome Powell confirmed the news following the meeting.
“At the Federal Reserve, we are strongly committed to achieving the monetary policy goals that Congress has given us; maximum employment and price stability. Today, in support of these goals, the Federal Open Market Committee kept its policy interest rate near zero, and stated its expectation, that an increase in this rate would soon be appropriate,”
Powell said
However, while the Fed has no plans to implement any immediate rate hikes, the Committee did not rule out that they may come sooner rather than later.
Powell also verified that the FOMC has also decided that it will continue to reduce the pace of its Quantitative Easing program, bringing the asset purchases to an end as early as March.
“The committee also agreed to continue reducing its net assents purchases on the schedule we announced in December, bringing them to an end in early March,”
the Fed Chair continued.
The FOMC also decided to limit the central bank’s monthly bond-buying to just $30 billion in February.
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The Federal Reserve happy with economic growth
Citing vigorous economic growth, Powell informed that trade expanded at a robust rate last year. After showing great strength and resilience, the economy has now come to a point where the Fed can now step in to begin its policy of tapering.
The stronger labor market is also another reason why the Federal Reserve feels the necessity to end its QE. According to the latest data Poweel provided, the economy has seen jobs increase to the tune of 6.4 million. Unemployment, on the other hand, declined to just 3.9%.
In addition, according to the conclusions of The Federal Open Market Committee (FOMC), the fast-paced drop in the Omicron cases in the US will result in further economic recovery.
However, Powell also admitted that the economic implications of the virus still remain uncertain. Inflation, according to him, remains way above our longer-run goal of 2%.
The Federal Reserve also released a list of principles for reducing the size of the Federal Reserve’s balance sheet. According to the Fed Chair, the participants of the meeting across the board have agreed to adhere to
“The Committee will determine the timing and pace of reducing the size of the Federal Reserve’s balance sheet so as to promote its maximum employment and price stability goals,”
the list reads.
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Bitcoin and cryptos tank Federal Reserve meeting
Following Powell’s press conference, the cryptocurrency market began feeling the heat. Bitcoin (BTC), the leading crypto, tanked over $1600 within hours.
At the time of writing, BTC’s price was trading at $36,480, a massive drop from the $38,200, according to CoinMarketCap. Bitcoin initially registered a 6% growth, drawing much excitement before the bears took over, wiping out all recent gains.
While the drop in the BTC price will undoubtedly follow with a sea of red on the cryptocurrency charts, a high degree of uncertainty is sure to reign for now.
