Saturday, May 21, 2022

Fed Announces Interest Rate: What Will Be the Effect on Bitcoin (BTC)?

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The Fed’s December interest rate decision is expected to be announced on Wednesday. The latest policy rate decision of 2020 could help Bitcoin’s uptrend, further undermining the US dollar’s support.

The central bank may leave the policy interest rates at 0-0.25 percent as in November at the meeting to be held on Tuesday and Wednesday, and decide to keep the interest rates until they achieve maximum employment and inflation above 2%.

The market also does not expect any changes to the Fed’s asset purchase program guidance. The central bank currently buys $ 80 billion in treasury bonds and $ 40 billion in mortgage-backed securities every month. Authorities have pledged to continue buying debt at the current pace in the coming months.

What will be the Effect on Bitcoin (BTC)?

The combination of very low-interest rates and unlimited buying bonds tends to benefit Bitcoin. The leading cryptocurrency has increased by 400% to date from its lowest mid-March level against these policies. Because they made holding the US dollar and lower-yielding short-term treasury bills less attractive to investors.

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