The Federal Reserve raises rates by 25 basis points

Today, the US Federal Reserve announced that it would take interest rates to the range of 4.50% to 4.75%, an increase of 0.25% from last month. Rates were still at 0% less than a year ago.

Rates Between 4.50% to 4.75%

The Federal Reserve is raising interest rates by 25 basis points.

The US central bank announced today during the Federal Open Market Committee that it would raise federal interest rates by just 0.25%, bringing them to a range of 4.50% to 4.75%.

Markets widely anticipated the rate hike, with analysts pricing the odds of a 25 basis point hike at 98% and the odds of a 50 basis point hike at 2%. Neither the major indices nor the crypto market reacted strongly to the announcement, with BTC only rising 0.07% immediately after the news.

This is the eighth time the Federal Reserve has raised interest rates since early 2022. The central bank outlined its plan to tighten monetary conditions in November 2021 to combat raging inflation; back then, interest rates were at 0%. After coming under fire for not taking inflation fears seriously, the Federal Reserve moved quickly to raise rates on a monthly basis, first by 25 points, then 50 points, then 75 points on multiple occasions. By doing so, the bank raised the cost of borrowing, which in turn strengthened the value of the dollar.

However, the Fed’s aggressive stance was criticized by a number of entities, including the United Nations, which warned in october that the central bank risked causing a global recession by raising rates too fast. The Fed finally began to moderate its aggressiveness in its hikes last month, when it raised rates by 50 basis points instead of 75. Today’s decision is another step in that direction.

Disclaimer: At the time of writing, the author of this article owned BTC, ETH, and various other crypto assets.