The Federal Open Market Committee (FOMC) concluded its November meeting today and announced that interest rates will remain unchanged. This signals an end to the aggressive rate hiking cycle we’ve seen throughout 2022 as the Fed attempts to combat high inflation.
The decision to hold rates steady points to a potential pivot in Fed policy, moving away from an ultra-hawkish stance to a more dovish approach. This is likely due to early signs that inflation may be moderating along with concerns over slowing economic growth.
In response to the FOMC decision, risk assets like stocks and cryptocurrencies are seeing a boost. Bitcoin, the largest cryptocurrency by market capitalization at $1.29 trillion, is trading above $34,500 while Ethereum, the second largest crypto, is hovering above $1,800 and seeing similar gains.
BREAKING:
— Michaël van de Poppe (@CryptoMichNL) November 1, 2023
Rates are unchanged from the FOMC.
The policy is ending and, most likely, hikes are done.
Short-term more positivity towards risk-on assets seems likely, including #Bitcoin.
Crypto traders are cheering the prospect of less aggressive Fed policy, which could provide tailwinds for the industry after a brutal bear market in 2022 and market crash in summer this year. Other risk-on assets like tech stocks are also reacting positively to the FOMC standing pat on rates.
While the Fed reiterated that ongoing rate hikes will be appropriate to reign in prices, the tone was decidedly less hawkish than recent meetings. This has fueled optimism that the end of the tightening cycle may be nearing, providing light at the end of the tunnel for battered growth sectors like crypto.
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The next few FOMC meetings will be crucial in determining whether the Fed sticks to a more dovish policy stance or feels the need to continue hiking aggressively to control inflation. For now, crypto investors are breathing a sigh of relief and cheering the potential dawn of a new market cycle.
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