Fed resumes raising rates, crypto and equities stay flat
The move comes after the central bank paused interest rates in June, marking the first hold in 15 months
The Federal Reserve opted to resume increasing interest rates Wednesday after a one-time pause in June.
Economic activity “has been expanding at a moderate pace,” the central bank wrote in its Federal Open Markets Committee statement, citing job gains and a sustained low unemployment rate. Plus, US banks have proven to be “sound and resilient,” the statement added.
The move comes after the central bank paused interest rates in June, marking the first hold in 15 months. There had been ten consecutive rate increase rounds prior to last month, a strategy the Fed hoped will curb the highest inflation the country has seen in more than four decades, but markets have fretted over whether a soft landing is achievable.
“In determining the extent of additional policy firming that may be appropriate to return inflation to 2 percent over time, the Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments,” committee members wrote in the statement.
The committee also noted that the Fed will continue to lower its holdings of Treasury securities and mortgage-backed securities.
The S&P 500 lost as much as 0.2% Wednesday morning before the Fed’s announcement. In the moments after the rate decision was revealed the index was able to inch back close to its intraday high.
The Nasdaq Composite similarly rebounded slightly, but still remains about 0.2% lower at time of publication.
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