The Fed on Wednesday kept its key interest rates unchanged at the 5.25% – 5.5% range, exactly as predicted by economic observers. This is the third straight time the Fed has held interest rates steady after adjustments in September and November, and is the fourth time in 2023 that interest rates have not been changed (along with June).
“Tighter financial and credit conditions for households and businesses are likely to weigh on economic activity, hiring, and inflation. Recent indicators suggest that growth in economic activity has slowed substantially from the outsized pace seen in the third quarter. Inflation has eased from its highs, and this has come without a significant increase in unemployment. That’s very good news”, the Fed said.
The Fed also updated its forecast for interest rates at the end of 2024 to 4.6%, showing that the Fed may cut interest rates by 0.75% next year. Goldman Sachs previously forecast that the Fed would only start reducing interest rates in half of 2024.
The Fed expects that maintaining stable interest rates for a while longer will help the US central bank reduce the inflation rate by the end of 2024 to 2.4%, compared to 3.2% at the present time.
After falling from $44,000 to $40,500 earlier this week, Bitcoin (BTC) price has recovered to $43,475. The world’s largest cryptocurrency still has the opportunity to continue growing in the rest of December as the deadline for the US Securities Commission (SEC) to approve a series of Bitcoin spot ETF proposals gets closer.
Similar to BTC, Ethereum (ETH) also returned to the milestone of $2,280 but is still far from the yearly peak of $2,403 on December 9. Other top altcoins are also recovering impressively, with increases in the range of 4-16% over the last 24 hours.