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Fed interest rates will remain close to zero

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The US Federal Reserve said on Wednesday that it would keep interest rates close to zero, even though it is considering canceling its quantitative easing program. Was designed to support the financial market during the spread of coronavirus in March 2020.

Fed interest rates will remain close to zero

The key short-term interest rate in the US will now remain in the current range of 0% to 0.25%.

Cryptotraders have followed the Fed’s announcement of monetary policy as monetary deregulation tends to put downward pressure on the prices of risky assets, which include cryptocurrencies and stocks.

The Fed’s latest decision comes at a time when the central bank is ending its asset purchase program, an emergency buying measure in the market that involved printing tens of billions of dollars a month to buy government bonds and mortgage-backed securities.

The program was expected to be completed in March, and many traders and economists expect the Fed to start raising interest rates this month. This will be the first increase since 2018.

Even before the decision was made, BTC  rose to $ 38 900, but is currently booming 35,800 with a drop of 4% in the last 24 hours at the time of writing.

Despite the fact that some analysts see BTC as a hedge of inflation, practice shows that it is sometimes traded as a stock: it rises as the Fed maintains a loose monetary policy and falls as the central bank tightens it.

Based on this, some analysts suggest that pressure from the Fed may have reduced BTC’s yield in 2022 to such an extent that it would be more advantageous for the investors to keep stablecoins pegged to the US dollar.

One of the main reasons why investors could choose stablecoins before cryptocurrencies such as BTC is the lower level of volatility.

Scott Bauer, former trader and CEO of Prosper Trading Academy Goldman Sachs

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All content in this article is for informational purposes only and in no way serves as investment advice. Investing in cryptocurrencies, commodities and stocks is very risky and can lead to capital losses.

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