2 years ago
Date: 19 Feb 2022 - 14:13

Fed minutes are indicative of a plan to aggressively raise rates.Fed officials during the meeting also expressed concern over cryptocurrencies and stablecoins.nbspAnalysts are unsure of how this development may impact the cryptocurrency markets.The release of the Feds January meeting minutes has made it clear that the Fed plans to raise rates more aggressively with inflation at record levels. In the released minutes the Fed also broached the topic of crypto and stablecoins raising concerns about the growth of the asset class.Cryptocurrency Endangers Financial StabilitySince November 2021 the Fed has become more hawkish shutting down a lot of stimulus programs to ease the printing of the dollar. However up till now the body has remained reluctant to raise rates. This stance has changed after the Federal Open Market Committee FOMC meeting in January revealed that the Fed was going to raise rates in March.The minutes of the FOMC meeting in January have now been released and they reveal that the Fed plans to raise rates more aggressively than was thought previously. It was decided that if inflation did not go down as expected they would raise rates at a faster pace. The Labour Department report showed that inflation was at 7.5 0.2 higher than predicted.According to the minutes If inflation does not move down as they expect it would be appropriate for the committee to remove policy accommodation at a faster pace than they currently anticipate.The Fed also revealed that they were going to take trillions of dollars from the bond market. It said a significant reduction in the size of the balance sheet would likely be appropriate. The Feds assets now total about 9 trillion a 5 trillion increase from about the same time last year. However rate hikes were not the only issue discussed by the Fed. The Fed also raised concerns about cryptocurrencies and stablecoins.nbspFed officials raised concerns about the rapid growth of the nascent market because they felt that the space may be posing an increased risk to financial stability. The minutes read Some participants saw emerging risks to financial stability associated with the rapid growth in cryptoassets and decentralized finance platforms. Stablecoins were categorized as 8220another vulnerability in funding markets. It is important to note that these sentiments may influence future policy around the nascent market.nbspnbspMarket Reaction And OutlooknbspFollowing the release of the minutes there were retracements across the board in the crypto markets. Bitcoin fell from a high of 44132 to a close of 40538 a 9 drop. Other assets like Ethereum BNB and Solana also had 7 6.7 and 8.8 drops from their highs.nbspAt the moment the markets have not moved much from the close of yesterdays market. Bitcoin is currently trading at 40182 on major exchanges 0.82 below the last day.nbspTom Lee cofounder of Fundstrat Global Advisors in an interview with CNBC gave his view on Bitcoin with rumors of impending rate hikes. He expressed his belief that trillions of dollars will flow from bonds to equities and a lot of that speculative capital will end up in crypto markets.nbsp

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USDT Market Price Change (24H) Market Cap Last 7 Days
39997.79 $ 0 % 760.32 Billion $
3001.33 $ 0 % 360.05 Billion $
1.001 $ 0 % 82.65 Billion $
398.86 $ 0 % 59.29 Billion $
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