Fed Maintains Interest Rates for 7th Consecutive Time - Bitcoin Price "Returns to Starting Point"
On June 12th (U.S. time), the Federal Open Market Committee (FOMC) of the U.S. Federal Reserve announced its latest interest rate decision, keeping rates unchanged within the range of 5.25% to 5% - the highest levels since the 2008 financial crisis.
Fed Maintains Interest Rates for 7th Consecutive Time - Bitcoin Price "Returns to Starting Point"
Image: CNBC
This marks the 7th consecutive meeting where the Fed has refrained from adjusting interest rates. Federal Reserve Chairman Jerome Powell's objective remains to keep inflation in the world's largest economy around 2%.
Interest rate fluctuations in the U.S. since the early 20th century. Source: CNBC (12/06/2024)
The history of Fed interest rate adjustments from early 2022 to date. Source: CNBC (12/06/2024)
Following these developments, financial observers in the U.S. have lowered their expectations of the Fed cutting rates further, anticipating only one more reduction by the end of 2024, bringing the target rate to 5-5.25%.
Some express concerns that if the Fed continues to maintain high interest rates without implementing additional regulatory measures soon, the U.S. economy could enter a period of stagnation.
As reported by Coin68 on the evening of June 12th, the U.S. Consumer Price Index (CPI) for May 2024 came in at 3.3%, slightly below the forecasted 3.4%. This news prompted Bitcoin to recover from $67,800 to as high as $70,000 USD, seen as a positive signal for the Fed to reconsider its stance on rate cuts.
However, with the unchanged interest rate announcement, the world's largest cryptocurrency quickly retraced to previous levels, currently trading in the range of $68,000 - $68,500 USD. BTC even dipped to its lowest June point of $66,000 USD amidst selling pressure on June 11th.
In the past 24 hours, nearly $200 million worth of derivative contracts have been liquidated in the crypto market, with long positions comprising 55%.
Data on liquidations in the past 24 hours. Screenshot from CoinGlass at 08:00 AM on June 13, 2024.
