Breaking: Fed raises rate by 50 BPS in response to market expectation, stocks fall

Fed Rate Hike Decision News: According to market expectations, the Federal Open Market Committee (FOMC), announced a 0.50% increase in interest rates. According to the Fed, it is likely that rate hikes will be repeated at current rate increases. This is a slowdown in rate increases after several months of inflation fears causing rates to rise by 75 bps. The stock markets have been moving up on Wednesday after a positive 24 hour period of crypto trading following the release of the November Consumer Price Index (CPI). The Fed announcement caused a crash in stock and crypto prices.
Stocks rose on Tuesday as a result of the annual 7.1% CPI increase. In light of comments made by Fed chair Jerome Powell regarding a possible slowing down in interest rate hikes, the FOMC’s latest interest rate decision was made. Markets were anticipating a 50-bps increase in interest rates. Jerome Powell, Fed chair, is expected to release economic projections on interest rate, unemployment, and economic growth in America.


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The FOMC stated that it aims to achieve maximum employment and inflation at a rate of 2 percent in the long-term, as per its long-term plans.
“The Committee anticipates that continued increases in the target range are appropriate to achieve a stance in monetary policy sufficiently restrictive to return inflation over time to 2 percent.”
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Bitcoin (BTC), price rose by approximately 1.05% in the hour before the rate hike announcement. This suggests a positive momentum and a 50 bps rate increase is expected. According to CoinMarketCap, the BTC price is at $17,953, an increase of 1.27% over the past 24 hours. However, BTC saw a drop of 0.55% following the rate increase announcement.
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The S&P 500 Index saw a 0.68% decline in the same time frame. This is compared with the 0.50% increase it saw before the announcement.

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