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Bitcoin Rises Above $22,000 As Fed Raises Interest Rates By 0.75%

On Wednesday, the Federal Open Markets Committee increased its target interest rates for federal funds by 75 basis points or 0.75%. This was the largest back-to-back rate rise since 1980.

Jerome Powell, Chairman of the FOMC, and Federal Reserve, spoke about the rate hike during the usual follow-up conference.

Powell started by noting that both indicators for production and spending have slowed but also attesting that the labor market was still strong.

Powell also discussed a variety of topics, including continued supply chain constraints and fears of recession, continued qualitative tightening, the Ukrainian War, and offered insight into future FOMC actions in relation to rising inflation pressures.

Powell stated that a second unusually large increase might be appropriate at the next meeting.

Powell stated last month at the FOMC meeting that the committee is not trying to incite a recession. There is little hope for economic growth if there are hints made at the meeting about the continuing difficulties facing the economy’s borrowers via rising rates. The chairman stated that a recession was more than a possibility. It’s likely due to rate increases.

Powell stated that Powell expects more increases to come. The FOMC believes that the economy must slow down if the U.S. is to have any hope of price stability.

He explained that this process would likely result in a period of lower than average economic growth and a weakening of labor markets. “We believe it is necessary for growth to slow down.

Bitcoin’s price briefly touched $23,000 before the news about the rate hike and the press conference. At the time of reporting, the peer-to-peer digital currency was being exchanged for $22,800.