United States: Key interest rate rises 0.75 percent, crypto market recovers

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In the US, interest rates rose back to 0.75 percent, but the crypto market is recovering. Further losses were feared due to the impending rate hike, which came as no surprise.

Fed raises interest rates by 75 basis points

In March of this year, the US Federal Reserve ended the last two years of the zero interest rate policy by announcing a 0.25 percent hike in the key interest rate. The next increase followed in May – this time also by 0.50 percent.

This news led to an outflow of huge amounts of money from the crypto market. Many investors took their money from risky markets that they had previously invested in on credit.

Bitcoin lost a good quarter of its value in a very short time. Ultimately, rising interest rates also contributed to the complete collapse of the Terra ecosystem.

The FED has now announced that it will raise interest rates by a further 0.75 percent. This is the largest interest rate hike since 1994. US Federal Reserve Chairman Jerome Powell even announced another hike in July.

Powell expects a rate hike of 0.50 to 0.75 percent in July. However, he cannot make any concrete statements on this. The responsible body, the FOMC, makes its own decision at the respective conference.

Experts had previously assumed that there would only be three rate hikes this year.

Bitcoin & Co. are growing despite rising interest rates

The announcement of a rising interest rate has caused tremendous damage to Bitcoin and the entire crypto market as of late. This trend is now breaking. BTC jumps above $21,000 while setting a yearly low around $20,000 yesterday.

At around 3:00 p.m., Bitcoin also managed to rally to $22,800 in value. Although it’s been downhill since then, the 24-hour trend shows green numbers.

bitcoin m-cap | see 401.643.118.782 see 21,004.44 3.61%

Almost all cryptos in the top 100 are starting to rally. Only a few red numbers have been caught since yesterday.

The official goal is to prevent widespread inflation by raising interest rates. The European Union’s central bank, the ECB, is now following the lead of the US Federal Reserve.

In the European Union and the United States, inflation is now only between eight and eleven percent. The US Federal Reserve normally targets inflation at 2 percent per year. The Fed has announced that it is now determined to get back to that target.

Rate hike also in Switzerland

The Swiss National Bank also surprisingly announced that it would raise the key interest rate. The inflation rate in this country is only 2.8 percent. Although inflation was higher than expected, it was very moderate by international comparison.

For the first time in seven years, the SNB is now raising the key interest rate by 0.50 percent. Overall, however, it is still -0.25%.

According to Governing Board member Andrea Machler, it must be assumed that further interest rate hikes will be necessary in order to cope with inflation.

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