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The vast majority of retail client accounts lose money when trading CFDs.

You should consider whether you can afford to take the high risk of losing your money.

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The vast majority of retail client accounts lose money when trading CFDs.
Important Notice - Fraud awareness
Important Notice - Scam alert
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail client accounts lose money when trading CFDs. You should consider whether you can afford to take the high risk of losing your money.
Important Notice - Fraud awareness
Important Notice - Scam alert
The vast majority of retail investor accounts lose money when trading CFDs / Spread betting with this provider.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail investor accounts lose money when trading CFDs / Spread betting with this provider. You should consider whether you understand how CFDs / Spread betting work and whether you can afford to take the high risk of losing your money.
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BTCUSD Hit By Interest Rate Hike From The Fed

The Bitcoin price was trading below the $19,000 level after the Federal Reserve hiked interest rates by another 0.75%.

Traders also saw the prospect of a similar move in November as the central bank remains committed to reeling in inflation.

Bitcoin: Daily Chart

Bitcoin is approaching its June lows and a drop below that could be harsh for BTC.

US stocks led the market lower after the Fed hiked rates to 3.00–3.25% and added hawkish projections for further monetary policy action. Traders focused on the 2023 median rate forecast being raised to 4.6% from 3.8% in June. Some analysts are now seeing the chance of another hike in November.

For Bitcoin, the negativity stems from the US dollar, which is being lifted by the hawkish Fed. That also means that treasury yields are proving higher returns for the safe haven asset.

The decentralised finance (DeFi) sector attracted investors last year with high-yielding coins. The collapse of the Terra project and the rising US benchmark rate are taking further investment away.

Fed Chair Powell said the Fed will seek a return to sufficiently restrictive rates and that price pressures are evident across a wide range of products. The central bank continues to see inflation risks as being weighted to the upside. The chairman said that the bank would need to see real evidence that inflation was coming under control, but the most recent print was higher than analysts had expected. In addition, Powell also stated during his Q&A that to start cutting rates, the Fed would need to see inflation heading back towards 2%.

"Based on our expectation that the Fed will take rates to 4% by December, this will be one of the fastest episodes of Fed tightening in the post-war period," said Brian Coulton, chief economist at Fitch Ratings. 

There was also negativity surrounding the Fed’s economic outlook, saying:

"Recent indicators point to modest growth in spending and production. Job gains have been robust in recent months, and the unemployment rate has remained low," according to the statement by the Federal Open Market Committee (FOMC), a group of Fed officials who set monetary policy.

Last Updated: 22/09/2022

This market commentary and analysis has been prepared for ATFX by a third party for general information purposes only. Any view expressed does not constitute a personal recommendation or solicitation to buy or sell as it does not take into account your personal circumstances or objectives, and should therefore not be interpreted as financial, investment or other advice, or relied upon as such. You should therefore seek independent advice before making any investment decisions. This information has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. We aim to establish and maintain and operate effective organisational and administrative arrangements with a view to taking all reasonable steps to prevent conflicts of interest from constituting or giving rise to a material risk of damage to the interests of our clients. The market data is derived from independent sources believed to be reliable, however we make no representation or warranty of its accuracy or completeness, and accept no responsibility for any consequence of its use by recipients. Reproduction of this information, in whole or in part, is not permitted.


 

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