US Federal Reserve officials could be set to increase the interest rate by another 75-basis points, according to a Wall Street Journal report on Oct. 21.
According to the report, the officials would also begin plans to reduce their interest rate by December. The report cited a speech by Fed governor Christopher Waller who said the officials will have a “thoughtful discussion about the pace of tightening at our next meeting.”
Fed Vice Chairwoman Lael Brainard and some other top officials stated that a continued hike of 0.75% could influence the economy over time. According to them, there are dangers surrounding hiking the rates too high.
Meanwhile, Cleveland Fed President Loretta Mester had hinted that she would vote in favor of a 0.75 hike in their next two meetings because inflation was still biting the country hard. According to her, the authorities shouldn’t allow “wishful thinking” to drive policy decisions.
Chicago Fed President Charles Evans reportedly said:
I worry that if the way you judge it is, ‘Oh, another bad inflation report—it must be that we need more [rate hikes],’… that puts us at somewhat greater risk of responding overly aggressive.
These opposing views show how divided the authorities are in how they feel their decision could impact the economy.
The Fed had increased the interest rate by 75 basis points in each of their last three meetings. Before now, the federal agency had not hiked the interest rate by 0.75% since 1994.
Fed Interest Rate and Bitcoin
The Fed’s attempt to combat the sky-high inflation has always impacted the price performance of the crypto market. In September, when the authorities revealed the latest hike, the value of Bitcoin and Ethereum briefly dropped.
Since then, Bitcoin has traded between $18,000 to $20,500. Ethereum, despite the euphoria of the merge, traded between $1,200 and $1,300, according to Coingecko data.
The declaration also negatively impacted other crypto assets besides the two flagship digital assets.
The crypto market has been in the thick of a bear market that has seen several crypto-related firms file for bankruptcy and c-suite executives leave their positions.