Fed cuts interest rates for the first time in more than 4 years - Bitcoin increases 3%
For the first time in 4 years, since 2020, the US announced a sharp interest rate cut, as predicted by investors.
In the early morning of September 19 (Vietnam time), the US Federal Reserve (Fed) decided to cut interest rates by 0.5 percentage points, as previously confirmed.
This is the first interest rate cut by the Fed since March 2020, opening a monetary policy easing cycle, in the context of cooling inflation and increasing concerns about the health of the labor market.
In a statement after the policy meeting, the Fed said that the US reference interest rate decreased by 50 basis points (0.5%), to the range of 4.75-5%/year. At the same time, the Fed signaled a further interest rate cut of 0.5% by the end of this year. The Fed then plans to cut four more times in 2025 and two more times in 2026.
The Fed has raised interest rates a total of 11 times from March 2022 to July 2023, from a low of 0-0.25%/year to 5.25-5.5%/year to curb inflation.
Fed policymakers are confident that inflation is moving towards the 2% target in a sustainable manner. However, the Fed is ready to adjust its policy stance if risks arise that hinder the above goal.
"The US economy is in good shape, with solid growth. Inflation is falling. The probability of the labor market and inflation reaching the target is equal." - Chairman Jerome Powell said.
The Fed also commented on the possibility of an increase in the unemployment rate in the near future and adjusted the forecast to 4.4% by the end of 2024, an increase of 0.4% compared to the announcement in June.
According to experts, the Fed's decision to cut interest rates sharply shows that this agency is concerned about the labor market. By reducing borrowing costs, the Fed will encourage businesses to hire and expand production, thereby creating more jobs and promoting economic growth.
Within a few minutes of the FOMC's decision, the price of Bitcoin increased by 1.2% to $61,000, but then fell below $60,000 and then increased again to $62,138 today. Overall, BTC has remained mostly sideways in the past 24 hours. Perhaps because it is within the experts' estimates, Bitcoin has not reacted too strongly.
On the same reference frame, the altcoins in the top 100 such as Ethereum and Solana also increased within the range of 5-20%.
Price fluctuations of cryptocurrencies in the top 100 capitalization, screenshot of CryptoBubbles at 10:00 AM on 09/19/2024
In the past 12 hours, the liquidation rate in the crypto derivatives market reached more than 150.7 million USD, the shorts accounted for the majority of 75%.
