Liu Hongjun: What impact does the 3.18 Federal Reserve decision have on the Bitcoin market? Will the sky-high price of Bitcoin continue to rise?
What impact does the Fed decision have on the Bitcoin market? Will the sky-high price of Bitcoin continue to rise? Can Bitcoin surge 5,000 points overnight and break through 60,000? Why do you want to buy sharply and sell sharply in the short-term today? What is the deal on the left? How to solve the quilt of Bitcoin contract? Why do you say that Bitcoin will be more "crazy"? Earn money in the bull market and earn money in the bear market, can you still make money playing Bitcoin now? Will Bitcoin, which has skyrocketed 500% in one year, still rise? How to operate the short-term range? How to make short-term profit in volatile market? 3.18 Ethereum market analysis and operation strategy: what point to enter the short-term rebound to lure long-term? What should I do with the low-position empty single quilt cover? Will Ethereum continue to fall? Will Bitcoin Still Fall?
Today's information:
In the early hours of the 18th Beijing time, the much-watched Fed March interest rate decision was announced! On March 17 local time, Federal Reserve Chairman Powell delivered a speech. Announced to maintain the target range of the federal funds rate between zero and 0.25%.
The Fed statement reiterated that it will maintain the pace of asset purchases until the economy makes substantial further progress. COVID-19 will still pose a huge risk to the economy. The path of economic development will depend largely on the course of the pandemic, including progress on vaccinations.
The Fed said inflation will rise this year as economic conditions improve, but it won't raise rates until 2023.
The Federal Reserve has sharply raised its forecast for the U.S. economy this year, predicting that GDP will grow by 6.5% in 2021, compared with only 4.2% in December last year. Along with GDP growth, the Fed expects the unemployment rate to fall to 4.5% this year from 6.2% now, compared with a forecast of 5% in December. Unemployment forecasts for 2022 and 2023 are 3.9% and 3.5%, respectively.
Regarding the inflation issue that the market is concerned about, the Federal Reserve has significantly increased its inflation expectations for this year. The median PCE inflation expectation at the end of 2021 was 2.4%, compared with 1.8% in December last year; The monthly forecast was 1.8%. In contrast, inflation expectations for 2022 and 2020 have only been slightly raised by 0.1%, and inflation in the next two years will be significantly lower than this year.
Federal Reserve Chairman Jerome Powell said the dangers facing the U.S. economy were clear a year ago and the economic recovery was uneven. The labor force participation rate remains below pre-pandemic levels, and the unemployment rate is still rising. In addition, he said inflation remained below the 2 percent target. Forecasts by Fed policymakers (for the economy) have been significantly revised upwards. A short-term increase in inflation above 2% does not meet the criteria for raising interest rates and is still a long way from achieving the employment and inflation goals.
Notably, the dot plot still shows the Fed not raising rates until 2023, although the number of people in favor of raising rates has grown. Four of the FOMC's 18 members are seeking a rate hike in 2022, up from just one at its December meeting. Seven members backed a rate hike in 2023, compared with five in December.
Summary of meeting points:
1. The Fed said that as the economic situation improves, inflation will also rise this year, but it will not raise interest rates until 2023
2. The Federal Open Market Committee, the policymaking body of the Federal Reserve, voted to keep interest rates near zero while continuing to implement the asset purchase program, that is, the Fed buys at least $120 billion in bonds every month
3. The committee’s GDP forecast for the United States in 2022 and 2023 is 3.3% and 2.2%, respectively, after which growth will stabilize in the range of 2.3%
4. The committee predicts that the U.S. unemployment rate will fall to 4.5% from the current 6.2%
5. The Committee expects the benchmark interest rate to remain unchanged until 2023, and some members said that the first rate hike may be in 2023
6. Policy will remain accommodative until “substantial further progress” has been made on the goals of full employment and price stability
7. The Federal Reserve believes that 2% inflation is a "healthy" level for the U.S. economy. The Fed believes that if inflation gets out of control, they also have the tools to control it
Markets had expected in recent weeks that the Fed might adjust its asset purchase program to buy more long-term bonds to intervene in rising U.S. bond yields, but there was no sign of doing so in Wednesday's rate decision. The Federal Reserve believes that an inflation rate of 2% is a healthy level for the economy. If inflation is out of control and Fed officials believe that they have the tools to control inflation, it is not difficult to see from the recent friction between the US government and the digital currency market that it is likely to be investment market.
The impact of the Federal Reserve's interest rate decision on Bitcoin, why does Bitcoin rise?
From the highlights of the meeting, we can learn that the Fed will continue to maintain a loose economic policy, and will not raise interest rates until 2023, and inflation will rise this year, which means that the economic "water release" policy will continue, and hot money in the market will It will increase, so when the real economy suffers a severe setback, some money will definitely flow into the stock market, funds and other financial markets.
As a result, at the same time last night, the three major U.S. stock indexes rose sharply, and the blockchain digital currency market as a whole rose, and Bitcoin, as the big brother in the blockchain field, must also rise.
