The Fed raised the rate for the 10th time in a row, a pause is possible. Bitcoin didn’t react

As expected, the US Federal Reserve raised the rate by 0.25% to 5.25% today. Jerome Powell said the decision to pause the rate hike has not yet been made.

The new rate hike was in line with consensus, however, all eyes were on Powell’s comments in light of the banking crisis. Many expected this to be the last rate hike and then a pause.

Interest in Powell’s speech was especially fueled by the fact that the Fed’s statement contained two theses of the opposite meaning:

1. The Fed is ready for a pause in rate hikes.
2. The Fed will continue to further reduce its balance sheet.

According to the Wall Street Journal, the style of the statement was reminiscent of a similar document from the Fed in 2006, when the rate hike cycle was completed. The current cycle consists of ten rate hikes in a row. From Fedwatch’s point of view, the futures markets are setting a pause in June and July.

Then Powell spoke. Here are the main points of his speech:

• Conditions in the banking sector have improved markedly, the banking system is stable.
• The Fed is committed to bringing inflation down to its target of 2%.
• The further trajectory of the rate will depend on the incoming data.
• The labor market is still strong.
• The economy will face difficulties due to tighter credit conditions.
• The decision to pause the rate hike has not yet been made.

So Powell didn’t say anything nice. During the press conference, the head of the Fed was asked many questions about the banking crisis – he admitted that many banks began to apply for liquidity.

Bitcoin took quite calmly both the positive news about the pause in raising the rate, and Powell’s doubts about this: the volatility of the asset within an hour after the publication of the Fed’s decision barely exceeded 2%. At the time of publication, the cryptocurrency exchange rate was $28,447 according to the cryptocurrency screener. Cryptovizorwhich determines the price of BTC/USD based on the results of trading on the main spot exchanges.

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