US Fed Fires Another 75 Basis Points Rate Hike at Record Inflation, Bitcoin & Ethereum Jump

cryptonews.com:

The US Federal Reserve (Fed) has hiked interest rates by 75-basis points, to the interval 2.25 to 2.5%, in line with what most analysts expected. (This is a developing story and is being constantly updated.)

“Recent indicators of spending and production have softened. Nonetheless, job gains have been robust in recent months, and the unemployment rate has remained low. Inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher food and energy prices, and broader price pressures,” the Fed wrote in its announcement of the rate hike.

Prices of both bitcoin (BTC) and ethereum (ETH) immediately rose following the announcement, with BTC gaining 1.7% to USD 22,000 and ETH rising 2.8% to USD 1,541 in 15 minutes after the announcement.

Analysts had widely expected the Fed to raise rates by 75-basis points, the same as during the previous Fed meeting in June. The same was also largely expected by market players, with the derivatives exchange CME’s FedWatch Tool ahead of the announcement indicating a 76% probability that the Fed would announce another 75-point hike.

Federal Funds rate ahead of Wednesday’s hike:

Still, some, including a chief economist at investment bank JPMorgan Chase, have floated the idea that the Fed could hike rates by a full percentage point, the largest rate increase in modern Fed history. The argument given for that is that it would be helpful in taming inflation, which last month reached 9.1% annually in the US.

And although inflation is sky-high, economic growth in the US is cooling, putting the Fed in a difficult situation as it raises interest rates. According to a survey of economists by the Wall Street Journal, the chance of a recession in the US in the next 12 months