Federal Reserve hawk turn
Rate hike to 4% after three years
The Federal Reserve #Fed ha has made a monetary U-turn by approving, with a unanimous vote of 12-0, a 25-basis-point increase in its interest rates, placing them in the target range of 3.75% to 4%.
This is the first rate hike from the agency since July 2023, driven by inflationary pressures stemming from higher oil prices, tariffs, and the push to invest in artificial intelligence.
Unanimous hike and hawkish bias: Despite political pressures and expectations of cuts early in the year, the FOMC closed ranks under the command of #KevinWarsh to prioritize price stability, warning that inflation (forecast at 3.7% for 2026) will take until 2029 to converge to the 2% target.
Dot Plot projections: 16 of the 18 participants expect at least one additional rate increase before the end of the year, opening the door to a more aggressive tightening in the near term. No rate cuts are expected until the 2028-2029 period.
Tension in credit and mortgage markets: The reaction has not taken long in the debt market: yields on 10-year and 2-year Treasury bonds are nearing multi-year highs, while fixed-rate 30-year mortgages have surged to 7.19%.
Impact on risk markets and Crypto: A higher-for-longer rate environment increases the opportunity cost of capital, strengthening the dollar and putting downward pressure on liquidity in equities, commodities, and cryptocurrencies.
#CryptoNews
$BTC
$XRP
$SOL
Rate hike to 4% after three years
The Federal Reserve #Fed ha has made a monetary U-turn by approving, with a unanimous vote of 12-0, a 25-basis-point increase in its interest rates, placing them in the target range of 3.75% to 4%.
This is the first rate hike from the agency since July 2023, driven by inflationary pressures stemming from higher oil prices, tariffs, and the push to invest in artificial intelligence.
Unanimous hike and hawkish bias: Despite political pressures and expectations of cuts early in the year, the FOMC closed ranks under the command of #KevinWarsh to prioritize price stability, warning that inflation (forecast at 3.7% for 2026) will take until 2029 to converge to the 2% target.
Dot Plot projections: 16 of the 18 participants expect at least one additional rate increase before the end of the year, opening the door to a more aggressive tightening in the near term. No rate cuts are expected until the 2028-2029 period.
Tension in credit and mortgage markets: The reaction has not taken long in the debt market: yields on 10-year and 2-year Treasury bonds are nearing multi-year highs, while fixed-rate 30-year mortgages have surged to 7.19%.
Impact on risk markets and Crypto: A higher-for-longer rate environment increases the opportunity cost of capital, strengthening the dollar and putting downward pressure on liquidity in equities, commodities, and cryptocurrencies.
#CryptoNews
$BTC
$XRP
$SOL
