Today’s interest rate decision by the U.S. Federal Reserve (Fed) and the following press conference by the Federal Open Market Committee (FOMC) could make up for this year’s most important day so far for the Bitcoin price.<\/p>\n
In March, the Fed had raised the benchmark interest rate by another 0.25 basis points (bps). At the time, central bankers were leaving their next steps open. Fed Chairman Jerome Powell clarified that further rate hikes “may be appropriate” and that the decision “will be data dependent.”<\/p>\n
Most recently, the Consumer Price Index (CPI) surprised on the upside with an annualized decline to 5.0% (from 6.0%), but core inflation is proving to be very sticky. Nevertheless, the market expects today’s 0.25 basis point rate hike to be the last in this cycle.<\/p>\n
According to the CME’s FedWatch tool, 89% of market participants believe the Fed will make this move today, despite facing strong headwinds from U.S. politics yesterday. Democratic-led members of Congress called on the Fed to pause rate hikes.<\/p>\n
Ten senators and representatives, led by Senator Elizabeth Warren, expressed<\/a> concern about the Fed’s monetary policy strategy in a letter to Fed Chairman Jerome Powell on Monday and urged avoiding “a recession that kills jobs and crushes small businesses.”<\/p>\n Also arguing against continued aggressive policy is the fact that the fastest rate hike cycle in Fed history has caused deep cracks in the U.S. banking system. Following the fall of Silicon Valley Bank, Signature Bank and First Republic Bank, numerous other regional U.S. banks plunged deep into negative territory yesterday.<\/p>\n US Regional Bank Stock This Year:<\/p>\n 1. HomeStreet, $HMST<\/a>: -75% — The Kobeissi Letter (@KobeissiLetter) May 2, 2023<\/a><\/p><\/blockquote>\n\n
2. PacWest, $PACW<\/a>: -71%
3. Metropolitan Bank, $MCB<\/a>: -64%
4. Zions Bank, $ZION<\/a>: -51%
5. Western Alliance, $WAL<\/a>: -47%
6. KeyCorp, $KEY<\/a>: -45%
7. HarborOne, $HONE<\/a>: -39%
8. Valley National, $VLY<\/a>: -35%
9. Truist, $TFC<\/a>: -33%\u2026<\/p>\n