Federal Reserve Chair Jerome Powell conveyed his opinion today that the probability of a recession was not “particularly elevated” this year.
Earlier today, the Federal Open Market Organization, a major decision-making committee within the Federal Reserve System, finished its March meeting. As predicted, the Fed has taken the decision to increase interest rates by 25 basis points, raising them from near zero to between 0.25 percent and 0.5 percent .
Federal Reserve Raises Rates
The United States’ central bank hiked interest rates Wednesday for the first time since 2018. The Federal Reserve, which is required by Congress to assist preserve price stability and maximum employment, hiked interest rates by 25 basis points today, as was mostly predicted.
Today’s choice was not unanimous. The vote was 8-1, with the president of the Federal Reserve Bank of St. Louis preferring a 50 basis-point raise.
The Fed’s governing committee also raised its prediction for this year’s federal funds rate from its December projection of 0.9 percent to 1.9 percent , a rise Chair Powell acknowledged following the announcement. Interest rates of 1.9 percent at year’s end amounts to between seven and eight 25-basis point rises altogether.
The crypto market surged marginally in the last build up to the announcement of the FOMC meeting, dipping slightly as it grew more near. Total crypto market capitalization, as well as those of Bitcoin and Ethereum, remained up on the day overall but slightly down after the Fed’s decision to hike rates.
The Federal Reserve also revealed its revised forecasts for gross domestic product for 2022. In December, it expected 4 percent economic growth, but today it lowered this projection down to 2.8 percent . While it is lower than earlier expected, Powell commented how 2.8 percent would still be deemed good growth.
Chair Powell stated today his judgement that the probability of a recession was not “particularly elevated” for this year.
In a news conference after the decision, Fed Chair Jerome Powell emphasised that the Committee will likely continue hiking rates in future sessions as well as decrease the assets on its balance sheet in a coming meeting. He again highlighted that a healthy economy, paired with low unemployment and growing inflation, made federal funds rate rises acceptable.
Last month, the Federal Reserve slapped sweeping limits on itself that would prevent its members from trading equities and cryptocurrencies.
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