The US Federal Reserve has since raised interest rates by 75 basis points. Federal Open Market Committee (FOMC) met on Sept. 21 with the federal funds rate at 3.25%.
Bitcoin responded with a 6.5% swing to bottom at $18,600.
Meeting the expectations of “Jumbo Hike”
On September 13, the Bureau of Labor Statistics released data for the Consumer Price Index (CPI), which showed a 0.1% rise in August and 8.3% year-on-year inflation.
Better-than-expected inflation dashed hopes that the last rate hike would keep consumer prices down.
Pressure for a further ‘jumbo hike’ was on the back of scorching payroll data that showed a 528,000 job increase in July, more than double analysts’ expectations.
Since then, the dollar has risen further and the euro has fallen to a 20-year low of 0.98. The pound also continues to fall against the dollar, but he is currently trading at 1.13.
So talk of a shocking 100 bps point hike was on the agenda. But the Federal Reserve, after their debate, chose not to go to extremes.
The last FOMC meeting ended on July 27th, leading to a 75 basis point rate hike. Bitcoin rose his 18% to close at $22,900.
Heading into today’s announcement, Bitcoin traded higher after hitting a local low of $18,800 in the morning, peaking at $19,950 the night before the announcement.
However, selling occurred as soon as the news was released, and the idea that weekend selling was the market price of the announcement paid off.