Thursday, September 29, 2022
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Fed to Hike Interest Rates Again, Prompting Negative Reaction in the Crypto Market

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Another interest rate hike is set to be announced today by the Federal Reserve.

In a CNBC interview, Joe Maglia, the former CEO of TD Ameritrade, said that Fed chair Jerome Powell is committed to reducing inflation by hiking interest rates further. For Powell, raising rates is the most suitable way to mitigate U.S. inflation and help reduce inflation volume to 2%.

“We’re going to go to 2% on inflation, we’re going to continue to raise rates until we get there, and if we don’t do that, the problems we’re going to have long term are much more significant,” Moglia was quoted as saying in the interview.

He added that while everyone is expecting 75 basis points to the range of 3%-3.25%, the real concern should be on what the terminal rates will be in the long term.

Fed Ignore Investors’ Plea, Continue Hiking Rates

Despite calls made to the Federal Reserve to halt its continuous increase in interest rates, the Fed has continued to ignore them. The United States Federal Reserve is expected to further raise interest rates as part of its push to control rising inflation. 

According to sources familiar with the matter, as published by the Wall Street Journal (WSJ), the Fed will raise interest rates by three-quarters of a percentage point today, at the end of its two-day policy meeting.

The Federal Reserve has continuously increased interest rates since March 2022. At the time, the U.S. central bank hiked the rate by 25 basis points, while in May 2022, rates were hoisted to 50 bps. In June 2022, the interest rate was hiked to 75 bps and has remained so ever since. Financial investors expect an announcement from the Fed today on this month’s rate.

Later today, at 2 p.m. EDT (1800 GMT), the U.S. central bank will announce the new rates, and investors expect the country’s apex bank to maintain the 75 basis points hike.

Increased Crypto Volatility Amid Rates’ Hike  

The constant hike in interest rates has continued to negatively affect various assets, including cryptocurrencies. With many people expecting a hike in interest rates, the crypto market has been increasingly volatile since yesterday. 

However, Mike Novogratz, the CEO of Galaxy Digital, is confident that Bitcoin and other crypto assets “will win if the Fed reverts interest rate.”

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Lele Jima
Lele Jima
Lele Jima is a cryptocurrency enthusiast and journalist who is focused on educating people about how the nascent asset class is transforming the world. Aside from cryptocurrency-related activities, Jima is a lover of sports and music.


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