The Federal Reserve recently released the minutes of the Federal Open Market Committee (FOMC) meeting held on May 2-3 2023, shedding light on the central bankโs stance on monetary policy. Certain key points from the minutes paint an interesting picture for the Unitedย States economy and the broader financial markets.
Officials Split On Interest Price Hikes
Reportsย by the minutes, officials expressed divergent thoughtsย on the need for further interest price hikes. The economic forecast presented by the staff to the FOMC was indicative of the fact that tightening in bank credit conditions, along with existing financial constraints, would likely result in a mild fall followed by a moderate recovery thereafter in the year.
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Accordingย to expectations, the Federal Reserve raised key interest prices by 25 basis points to a range of 5.00 percent to 5.25 percent in May. Interestingly, participants in the meeting agreed on the soundness and resilience of the Unitedย States banking system. They did likewise express concerns that tighter credit conditions for households and enterprises could dampen economic activity, hiring, and markets. Nonetheless, the extent of these effects remained uncertain, reportsย by the minutes.
Concerns Over Growing Inflation
A number of participants expressed the belief that the progress made in bringing inflation back to the target price of 2 percent mayย be disappointingly slow. They suggested that additional policy measures couldย be necessary in future meetings. Nonetheless, others pointedย outย that if the economy continued to evolve as expected, further tightening after theย present meeting canย potentially not be required.
Furthermore, numerous officials emphasized the importance of raising the debt limit in a timely manner to avoid potential disruptions in the financial system and the broader economy. Inย summary, the minutes revealed a unanimous agreement between participants that inflation remained at an inappropriately highย degree and with the labor market remaining tight, โupside dangers to the inflation outlook remained a key factor shaping the policy decisionsโ.
In the wake of this news, the price of Bitcoinย (BTC) witnessed a marginal decline of 0.15 percent while Ethereumย (ETH) on the other hand exhibited a similar loss of 0.18%. Atย theย timeย ofย publication, Bitcoinย (BTC) was exchanging hands at $26,247.55 with the larger cryptocurrencyย market standing at $1.10 Trillion, which represents a decrease of 2 percent inย theย previous day.
