Bitcoin Pares Losses as Fed’s Powell Sees No Rate Hike Anytime Soon

Federal Reserve Chair Jerome Powell assures markets that monetary policy will stay loose "as long as it takes."

Mar 17, 2021 at 6:15 p.m. UTC
Updated Sep 14, 2021 at 12:28 p.m. UTC

Top Federal Reserve officials see inflation rising above 2% this year, but their median expectation is still for interest rates to stay close to zero at least through 2023, based on the "Summary of Economic Projections" released Wednesday.

Bitcoin prices pared earlier losses as Fed Chair Jerome Powell said during a televised press conference that the U.S. central bank expects to keep monetary policy loose "for as long as it takes" to heal the coronavirus-wounded economy. The largest cryptocurrency is seen by many investors as a hedge against inflation, and a dovish monetary policy stance could allow faster price increases.

Prices for bitcoin rose to about $56,500 after the meeting, from about $55,500 just prior to the 18:00 UTC (2 p.m. ET) release.

The Federal Open Market Committee (FOMC), the U.S. central bank's monetary policy panel, will keep the target rate for federal funds in a range of 0% to 0.25%, according to a statement released after a two-day meeting. The Fed plans to keep buying $80 billion of U.S. Treasury bonds and $40 billion of agency mortgage-backed securities every month.

U.S. stocks rose after the report.

According to the summary of economic projections:

  • Federal officials’ median expectation for growth this year in gross domestic product jumped to 6.5% from 4.2% in December, when they last disclosed projections.
  • The unemployment rate is seen at 4.5% this year, down from a previously projected 5%.
  • Inflation is now seen by Fed officials as averaging 2.2%, up from a 1.8% projection in December. 
  • The Fed funds rate is expected to stay at close to zero through at least 2023, though four officials now see an initial rate increase as soon as next year. At the December meeting, no Fed officials were expecting a liftoff that soon.

.


The Festival for the Decentralized World
Thursday - Sunday, June 9-12, 2022
Austin, Texas
Save a Seat Now

DISCLOSURE

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

Trending

1
CoinDesk - Unknown
How the US Can Establish Itself as a Crypto Leader

Regulators have an opportunity to map out thoughtful, strategic policy on stablecoins and beyond.

Regulators have an opportunity to map out thoughtful, strategic policy on stablecoins and beyond.

CoinDesk - Unknown
2
CoinDesk - Unknown
No, the UK Is Not Going to Make USDC and USDT Legal Tender

For “legalize” read “regulate.”

For “legalize” read “regulate.”

CoinDesk - Unknown
3
CoinDesk - Unknown
Thoughts From Davos

The crypto industry showed up in force at the World Economic Forum’s annual meeting.

The crypto industry showed up in force at the World Economic Forum’s annual meeting.

CoinDesk - Unknown
4
CoinDesk - Unknown
Bitso, primer unicornio cripto de América Latina, despide a 80 empleados

El exchange, que tenía más de 700 empleados antes de los recortes, cuenta con cuatro millones de usuarios en la región.

El exchange, que tenía más de 700 empleados antes de los recortes, cuenta con cuatro millones de usuarios en la región.

CoinDesk - Unknown