Crypto News– Despite higher-than-expected US CPI inflation figures for February, the Federal Reserve maintained its dovish stance during Wednesday’s FOMC meeting. As widely predicted, the Fed chose to keep interest rates steady at 5.25%-5.5%. Additionally, it stuck to its earlier forecast of three rate cuts for the year.
Crypto Rally Amid Fed’s Dovish Stance Despite Inflation
This prompted a significant rally in risk-on assets such as stocks and cryptocurrencies. All three major Wall Street indices reached new record highs during Wednesday’s trading. According to the March FOMC economic projections, policymakers anticipate reducing interest rates to 4.6% by the end of 2024, aligning with their previous December outlook.
The Fed’s decision to proceed with three rate cuts comes despite reports of higher-than-expected Consumer Price Index (CPI) and Producer Price Index (PPI).
Furthermore, Federal Reserve Chair Jerome Powell indicated that strong labor market momentum would not deter the Fed from cutting interest rates. “Strong hiring alone wouldn’t stop us from cutting rates,” he said, as reported by CNBC.
Massive bounce on #Bitcoin initiating continuation here.
— Michaël van de Poppe (@CryptoMichNL) March 21, 2024
I think we'll be consolidating, and, given the strong bounce, have another run to the all-time high pre-halving. pic.twitter.com/CfPbnNOJTS
Before the FOMC announcement, most market participants expected the first rate cut to occur in June. However, following the announcement, the market’s anticipation of at least one rate cut by June has risen to 70%, up from over 60% previously, according to data from the CME FedWatch Tool.
The Rally of Bitcoin and Alternative Cryptocurrencies
Bitcoin (BTC) made a remarkable recovery today, surging to a daily high of $67,781, marking an impressive gain of over 10% within the same day. Analysts anticipate this upward trend to persist leading up to the Bitcoin halving scheduled for next month in April.
Meanwhile, Ether (ETH) also experienced a strong rebound, rising by 11% and surpassing $3,300 earlier in the day. Despite reports of the Ethereum Foundation being subject to a confidential inquiry by an undisclosed government entity, bullish sentiment prevailed. Additionally, there’s growing speculation surrounding the potential classification of ETH as a security by the US Securities and Exchange Commission.
Furthermore, Dogecoin (DOGE), Litecoin (LTC), and Bitcoin Cash (BCH) emerged as top gainers among major cryptocurrencies. This surge in value followed the revelation of a Coinbase plan, which was disclosed on a US regulator’s website several weeks ago, to introduce futures contracts for these digital assets.
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