Fed Hikes Interest Rates, Bitcoin Defies Expectations
The Federal Reserve announced its first interest rate hike in three years, raising the benchmark interest rates by 25 bps. The target range for the federal funds rate has been increased to 3-3/4 to 4 percent in support of its dual mandate.
This decision was unanimous among committee members, with all 12 voting in favor of the hike. Several factors contributed to this decision, including strong US labor reports and hawkish comments from Fed Chair Kevin Warsh.
The inflation data released last week also provided additional reasoning for the central bank's decision.
Notably, Bitcoin reacted surprisingly well to the news, surging by a grand and a half to $76,500 before being stopped. This indicates that the market had already priced in the Fed's decision.