Federal Reserve Holds Policy Steady, Says Progress on Inflation Has Stalled

The Federal Open Market Committee (FOMC) acknowledged, as anticipated, that progress toward lower inflation has slowed down this year. They indicated that they would not consider reducing interest rates until they have more assurance that inflation is consistently heading towards their 2% target.

As a crypto investor, I’ve been keeping a close eye on the latest developments from the Federal Open Market Committee (FOMC). Alongside their rate decision, they announced a significant change in their quantitative tightening (QT) policy. Specifically, they’re slowing down the reduction of Treasuries held on their balance sheet from $60 billion per month to a mere $25 billion per month.

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The shift in anticipations has put pressure on conventional markets, with the Nasdaq declining around 5% since reaching its 2024 peak roughly three weeks ago and the S&P 500 experiencing a comparable decrease since hitting its highest point for the year in late March. This trend is likely to have played a role in the significant drop of bitcoin’s price, which currently stands over 20% lower than its record high from mid-March, surpassing $73,000.

After the Federal Open Market Committee (FOMC) made their announcement, I quickly reviewed the conventional markets. The stocks showed minimal movement, while the dollar and bond yields experienced slight decreases. Gold, on the other hand, saw a 0.5% increase to $2,316 per ounce. However, it remains approximately 4% below its record high of around $2,400 reached in mid-April.

Clues about the Federal Reserve’s thoughts will be revealed soon, as Chairman Jerome Powell is scheduled to conduct a press conference following the meeting, starting at 2:30 p.m ET.