Since earlier this year, the FED has been actively pumping up interest rates in an effort to control global inflation. At the same time, it is believed that the main aim is to take the global economy towards recession. Ever since November, another increase in interest rates was forecasted. As of now, The FED has taken the decision of pumping up interest rates by nearly 0.5% to control global inflation. It is worth mentioning that this is the seventh increase in interest rates this year.
However, it is widely believed that the FED would continue to pump up interest rates until it reaches a target of 5.1%. Similarly, the interest rates are bound to dip to approximately 4.1% in 2024. On the other hand, the inflation rates in the US managed to reach an alarming rate of 7.1%. Over the previous few months, inflation rates have declined greatly and this indicates that interest rates were indeed helpful. However, this current increase can be defined as the last hike of 2022. FED officials will meet once again by the end of January 2023 to decide the next inflation rate adjustment.
Despite the hike, Bitcoin has managed to remain stable. Initially, the crypto managed to witness a boost, making it trade over the $18,000 mark. However, this was short-lived as the token dropped to the $17,700 mark once again. At the time of writing, Bitcoin is trading for approximately $17,668.
Altcoins Take a Dive
Even though Bitcoin managed to remain stable as a result of the hike by the FED, many other altcoins have taken a massive hit. Ethereum is down by nearly 4.21% percent over the course of the previous 24 hours and is trading for nearly $1276. Even the popular memecoin, Doge, has taken a blow. The coin spiked as soon as Musk acquired Twitter but the FED’s hike pushed its price down by 4.13%. Dogecoin is currently trading for $0.08692. Even LTC is down by nearly 3.35% over the previous 24 hours and is currently trading at the $73.94 mark.
Apart from these, a great number of altcoins have been affected drastically. The crypto market is bound to bear the losses incurred by FED pumping up interest rates. It is still a matter of conjecture when the situation might improve. However, crypto is highly volatile and any shifts in the market can either result in great profit or losses.