{"id":8379,"date":"2022-09-24T08:52:36","date_gmt":"2022-09-24T12:52:36","guid":{"rendered":"http:\/\/cryptocornercafe.com\/cafe\/?p=8379"},"modified":"2022-09-24T08:52:36","modified_gmt":"2022-09-24T12:52:36","slug":"u-s-federal-reserve-set-to-hike-rates-above-400-bps-how-will-crypto-market-react","status":"publish","type":"post","link":"http:\/\/cryptocornercafe.com\/cafe\/2022\/09\/24\/u-s-federal-reserve-set-to-hike-rates-above-400-bps-how-will-crypto-market-react\/","title":{"rendered":"U.S Federal Reserve Set To Hike Rates Above 400 BPs \u2013 How Will Crypto Market React?"},"content":{"rendered":"

The United States Federal Reserve is tightening, and interest rates hike has heavily impacted on the crypto market. Earlier this month, Bloomberg Analyst McGlone said Bitcoin would outperform traditional stocks as interest rates hike. However, to this point, Bitcoin does not seem to follow Bloomberg\u2019s predicted trend.<\/p>\n

As a matter of fact, despite Bloomberg\u2019s bullish standpoint, Bitcoin and other cryptocurrencies are still in a crash. For example, BTC and ETH dropped by 2% after the Fed\u2019s announcement and bounced back. But have now crashed again. BTC is currently trading below $19,000.<\/p>\n

Bitcoin trends sidways below $19,000 l BTCUSDT on Tradingview.com<\/p>\n

The Fed Reserve\u2019s Federal Open Market Committee manages the economy during inflation and recession by controlling the money supply in the country. The Fed maintains the money supply via quantitative tightening and easing of reserves. As a result, a rise in interest rates triggers volatility in the market.<\/p>\n

Inflation Would Drop To 2% By 2025, Says Federal Reserve<\/p>\n

The Federal Reserve revealed its plans to tackle inflation at Thursday\u2019s Federal open market committee meeting. The Fed 75bps interest rate hike is just the tip of the iceberg as it plans to raise the rates as high as 400bps by the end of 2022.<\/p>\n

In August, the CPI indicated 8.3% YoY inflation, but the Federal Reserve forecasts inflation to come down to 2% by 2025. The Fed Reserve plans to bring inflation down to 5.4% by 2022 and 2.8% by 2023. Reports show that Fed raised this year\u2019s interest benchmark by four times. The current rates are between 2.25% to 2.50%.<\/p>\n

From the CNBN Fed Survey<\/a> for September, Fed\u2019s interest hike would remain at the peak rate for 11 months. John Ryding, the Chief economic advisor at Brean Capital, commented in response to the survey.<\/p>\n

Ryding said the Fed has finally realized the inflation problem is critical. He thinks the Fed\u2019s monetary tightening rate is a \u2018positive real policy rate.\u2019 The economist advises Fed to increase the current rate by 5%.<\/p>\n

The survey reported that among 35 survey respondents, some economists, strategists, and fund managers think Fed might overdo its tightening.<\/p>\n

Recession Would Hit Global Economy \u2013 World Bank<\/p>\n

The World Bank says recession would hit the global economy because of the war-like monetary policies of the world economy.<\/p>\n

Svan Henrich, the founder of Northman Trader, thinks interest rates would depend on recession than inflation in the next year. He thinks Jerome Powell, Chairman of the Fed Reserve, emulates Paul Volcker. Henrich further advised Powel to pivot before hitting the 40bps rates target. Paul Volcker is the former Chairman of the U.S Fed Reserves.<\/p>\n

Jerome refused to say much about the recession, saying he didn\u2019t know the depth or when the recession would occur. Meanwhile, Fed dismissed all speculations of recession.<\/p>\n

Everyone awaits the release of the following inflation data in the Consumer Protection Index for September. In addition, the next Federal Open Market Meeting will take place on November 2.<\/p>\n

Featured image from Pixabay, charts TradingView.com<\/p>","protected":false},"excerpt":{"rendered":"

<\/p>\n

The United States Federal Reserve is tightening, and interest rates hike has heavily impacted on the crypto market. Earlier this month, Bloomberg Analyst McGlone said Bitcoin would outperform traditional stocks as interest rates hike. However, to this point, Bitcoin does not seem to follow Bloomberg\u2019s predicted trend.<\/p>\n

As a matter of fact, despite Bloomberg\u2019s bullish standpoint, Bitcoin and other cryptocurrencies are still in a crash. For example, BTC and ETH dropped by 2% after the Fed\u2019s announcement and bounced back. But have now crashed again. BTC is currently trading below $19,000.<\/p>\n

Bitcoin trends sidways below $19,000 l BTCUSDT on Tradingview.com<\/p>\n

The Fed Reserve\u2019s Federal Open Market Committee manages the economy during inflation and recession by controlling the money supply in the country. The Fed maintains the money supply via quantitative tightening and easing of reserves. As a result, a rise in interest rates triggers volatility in the market.<\/p>\n

Inflation Would Drop To 2% By 2025, Says Federal Reserve<\/p>\n

The Federal Reserve revealed its plans to tackle inflation at Thursday\u2019s Federal open market committee meeting. The Fed 75bps interest rate hike is just the tip of the iceberg as it plans to raise the rates as high as 400bps by the end of 2022.<\/p>\n

In August, the CPI indicated 8.3% YoY inflation, but the Federal Reserve forecasts inflation to come down to 2% by 2025. The Fed Reserve plans to bring inflation down to 5.4% by 2022 and 2.8% by 2023. Reports show that Fed raised this year\u2019s interest benchmark by four times. The current rates are between 2.25% to 2.50%.<\/p>\n

From the CNBN Fed Survey<\/a> for September, Fed\u2019s interest hike would remain at the peak rate for 11 months. John Ryding, the Chief economic advisor at Brean Capital, commented in response to the survey.<\/p>\n

Ryding said the Fed has finally realized the inflation problem is critical. He thinks the Fed\u2019s monetary tightening rate is a \u2018positive real policy rate.\u2019 The economist advises Fed to increase the current rate by 5%.<\/p>\n

The survey reported that among 35 survey respondents, some economists, strategists, and fund managers think Fed might overdo its tightening.<\/p>\n

Recession Would Hit Global Economy \u2013 World Bank<\/p>\n

The World Bank says recession would hit the global economy because of the war-like monetary policies of the world economy.<\/p>\n

Svan Henrich, the founder of Northman Trader, thinks interest rates would depend on recession than inflation in the next year. He thinks Jerome Powell, Chairman of the Fed Reserve, emulates Paul Volcker. Henrich further advised Powel to pivot before hitting the 40bps rates target. Paul Volcker is the former Chairman of the U.S Fed Reserves.<\/p>\n

Jerome refused to say much about the recession, saying he didn\u2019t know the depth or when the recession would occur. Meanwhile, Fed dismissed all speculations of recession.<\/p>\n

Everyone awaits the release of the following inflation data in the Consumer Protection Index for September. In addition, the next Federal Open Market Meeting will take place on November 2.<\/p>\n

Featured image from Pixabay, charts TradingView.com<\/p>\n

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