The Federal Open Markets Committee (FOMC) is set to announce its next policy interest rate on Wednesday, and analysts anticipate that the rate will remain unchanged. The CME FedWatch tool indicates a 99% probability of a flat rate for Wednesday, which could have positive implications for Bitcoin.
Bitcoin’s price has historically shown a correlation with risk equities and central bank policies. When credit conditions are favorable, Bitcoin tends to experience price increases, and vice versa. If the Fed maintains its current interest rate, it could be bullish for Bitcoin.
Wharton Finance Professor Jeremy Siegel argues that the Fed should not raise interest rates. He believes that any further hikes could result in significant unemployment and only marginally impact core inflation. Siegel’s stance is a departure from his previous support for rate hikes in order to defend the dollar.
Siegel also expresses confidence in the strength of the stock market for the upcoming months, citing the current robustness of the economy based on real economic data.
Bitcoin experienced a surge in price from March 2020 to early 2021 after the Federal Reserve lowered its benchmark interest rate to 0.25%. Crypto YouTuber and trader Sem Agterberg, known as Crypto Rover on Twitter, shares the belief that a 0% rate increase in tomorrow’s announcement could be bullish for Bitcoin.
The FOMC took action to cut interest rates three times in 2019 as a response to a global economic slowdown, which helped to prevent a recession.
Overall, if the Federal Reserve decides to keep its interest rate unchanged, it could have a positive impact on Bitcoin, considering its historical correlation with risk equities and central bank policies.
– Federal Open Markets Committee (FOMC): The FOMC is a branch of the Federal Reserve responsible for determining the monetary policy of the United States.
– Bitcoin (BTC): Bitcoin is a decentralized digital currency that operates on a peer-to-peer network.
– Source article: [Please provide the source article]