The two largest cryptoassets bitcoin (BTC) and ethereum (ETH) rose in the market today, as a sense of relief sent nearly all risk assets higher ahead of the US Federal Reserve’s FOMC statement later today.
At 17:34 UTC, BTC was up almost 3% for the past 24 hours to a price of USD 38,268, while ETH was up over 6%, trading at USD 2,622.
At the same time, the technology-heavy Nasdaq stock index had risen 2.5%, and the S&P 500 index gained 1.7% – just over three hours into the trading day on Wall Street.
The Fed’s statement is expected at 14:00 EST (19:00 UTC) today, and it is widely expected that the Fed will confirm that interest rate hikes will start in March this year.
“We see the Fed building towards a March hike, but at the same time creating flexibility,” the European financial services firm Nordea wrote in a note ahead of today’s statement. It added that the statement “should dismiss” speculation about a 0.5% hike, and that it does not expect a faster pace of tapering to be announced.
“This could make for a brief market relief,” the bank wrote.
Commenting on how the market might react to the statement, George Selgin, an economist at the libertarian think-tank the Cato Institute, wrote on Twitter that he does not expect “modest” tapering to have a substantial impact at all.
“Tapering has become the latest market bugbear. Yet, in theory at least, unlike actual rate hikes, modest changes in the size of the Fed's balance sheet, in either direction, shouldn't have any substantial consequences,” Selgin said.
Meanwhile, others hinted that the market may not react so calmly to what the Fed has to say, with fund manager Steven Van Metre writing that getting inflation under control is now the most important task for the Fed, which
Read more on cryptonews.com