The U.S. Federal Reserve (Fed) raised interest rates again by 3 yards . Although it was in line with market expectations, Bitcoin rose to $20,705 at one point, but then took a dramatic turn, as Fed Chairman Jerome Powell released hawkish remarks, which hit the market against the Fed Hopes of raising interest rates will end, sending stocks tumbling, dragging down Bitcoin and nearly falling below the $20,000 round-figure mark.
This is the sixth time the Fed has raised interest rates this year, and it is the fourth consecutive rate hike of 3 yards. The current benchmark interest rate is between 3.75% and 4%. Investors had seen hope of a dovish turn in the Fed statement, believing it would be the last rate hike, so bitcoin, ether and the broader cryptocurrency market followed stocks higher after the announcement.
However, Fed Chairman Powell hinted in the follow-up conversation that the pace of interest rate hikes may be slowed down in the future, but it is still “premature” and “very immature” to consider suspending interest rate hikes at this stage, and the Fed must continue to raise interest rates until the The expansion rate has been maintained at 2% for a long time.
As soon as this statement came out, Wall Street and cryptocurrency traders were frightened, the Nasdaq index fell 3.36%, and Bitcoin fell as low as $20,064, almost falling below the $20,000 mark.
At press time, Bitcoin had recovered to $20,256, but was only down 0.8% over the past 24 hours, little changed overall.
In this regard, the cryptocurrency research team MICA Research commented:
Powell hinted that the rate hike in December will be 2 yards, although the rate is small, but they expect the rate hike next year will be more than the market expects, that is, the Fed is planning to slow down the pace of rate hikes, but pull the rate hike Longer and higher, the market will go through a longer cycle of rate hikes.
FOMC interest rate futures expect that the terminal interest rate next year may reach 5.00% to 5.25%. The current 2-year US Treasury bond interest rate is still at 4.6% and has not been adjusted to the futures level. Analysts pointed out:
The global financial market still needs a period of time to adapt to the new benchmark interest rate, and there will be large fluctuations in the short term. Cryptocurrency investors are also watching when the market will experience large fluctuations.