Fed Paused Rate Hikes, but Signal Two More Hikes Later this Year, Crypto Prices Drop

Crypto assets prices drop after the Fed meeting on Wednesday. $BTC has once fallen below the $25,000 mark for the first time since March 17 following a hawkish Fed announcement.

Federal Reserve officials paused on Wednesday following 15 months of interest-rate hikes but signaled they would likely resume tightening at some point to cool inflation.

The decision left the benchmark federal funds rate in a target range of 5% to 5.25%. Fresh quarterly Fed forecasts showed borrowing costs rising to 5.6% by year end, according to the median projection, compared with 5.1% in the previous round of projections.

The forecasts imply officials expect two additional quarter-point rate hikes or one half-point increase before the end of the year.

Chair Jerome Powell said nearly all Fed officials expect it will be appropriate to raise interest rates “somewhat further” in 2023 to bring down inflation.