Bitcoin Steady at $27,200 as Federal Reserve Projects Higher Interest Rates

• Bitcoin (BTC) is unshaken by the U.S. Federal Reserve statements on interest rate hikes for 2024.
• Fed Chair Jerome Powell believes the trend in inflation from the last couple of months is very good.

Bitcoin (BTC) has continued to trade sideways with a less than 1 percent change in the last 7 days. The Fear & Greed Index chart shows that investor sentiment is neutral. However, the leading digital asset has lost around 2 percent in the last 24 hours. Making up nearly half of the total market cap, this has seen the total market cap reach $1.05T after a nearly 2 percent dip.

The minimal price changes follow the release of the Federal Reserve’s FOMC statement. In its summary, the Fed revealed that it expects one more hike before the end of the year but fewer cuts than previously projected in the coming year. Furthermore, it held the monetary policy steady, leaving the range for its benchmark interest rate at 5.25 percent to 5.50 percent. If further expects interest rates to be higher next year at around 5.1 percent unlike previously projected 4.3 percent projected earlier this year.

Expecting a 2.1 percent real GDP increase versus a 1 percent forecast earlier, the Fed expects to see stronger economic growth for this year. The Fed statement reads;

In determining the extent of additional policy firming that may be appropriate to return inflation to 2% over time, the Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments,

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Fed Chair Jerome Powell has further revealed that the central bank will do more rate hikes if the economy remains stronger. In addition, the majority of Fed members believe one more rate hike is likely to accomplish the Fed’s goal during the remaining two Federal Open Market Committee (FOMC) meetings. The next FOMC meeting is set to start in November. In regards to inflation, the chair reveals that the readings from the last three months were very good.

Are the Federal Reserve Projections Good or Bad for Bitcoin (BTC)?

Following the statements, Bitcoin (BTC) remained steady but has since taken a marginal dip. At the time of press, Bitcoin is exchanging for $26,600. BTC investors will be watching the $26,500 support closely.

Zach Pandl, an economist at Grayscale Research explains that the Feds approach shows they have embraced the idea of a soft landing. Adding, “The last soft landing was in the mid-1990s, and this proved to be a terrific outcome for technology-related assets. While we can’t be sure there will be a soft landing, that scenario could be positive for bitcoin and ether (ETH).” The upcoming year is further influenced by the Bitcoin halving expected in April. Historically a bullish event, it could further fuel BTC prices.

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