Another meeting of the Federal Reserve System (FRS) has passed, and as expected, the rate was raised by 25 basis points. After listening to Powell at the press conference, it became clear that the FRS has finally realized that the problems in the banking sector are more than serious. The head of the FRS also understands perfectly well that in the event of a banking crisis, the FRS will be to blame.
The FRS gave a very specific signal that it will have to soften the monetary policy, the question is only in the timing. The FRS cannot say, "We overdid it with the rate hike, because inflation has not been defeated to the end."
On the other hand, the FRS is well aware that entropy is increasing, and in these conditions, no obvious decision will be ultimately correct. The FRS also understands that chaos in the global financial system may well be increasing.
It is also worth remembering that the situation is exacerbated by the conflict over raising the debt ceiling. And although this does not directly concern the FRS, it is still tied up. What does this mean for the crypto market?
Due to the banking crisis in the United States, many depositors begin to lose confidence in the banking system, which can serve as an excellent reason for the influx of new funds into crypto.
Also, if the collapse of banks does not stop, the FRS will be forced to print trillions of dollars, which will be thrown into saving banks, and we all know what will happen to the crypto rate in this case, of course, it will skyrocket.