On Wednesday, September 18th, 2024, the Federal Reserve dropped interest rates for the first time since the COVID-19 epidemic, lowering benchmark rates by half a percentage point to offset a probable labor market slowdown.
Amid slowing job growth and inflation, the Federal Open Market Committee voted to drop its main overnight borrowing rate by 50 basis points (half a percentage point), meeting market expectations for a greater cut.
Bitcoin stayed largely constant after the Federal Reserve cut borrowing rates for the first time since the COVID. The epidemic devastated the economy more than four years ago when cryptocurrencies gained popular attention.
The US central bank lowered its benchmark interest rate by half a percentage point. Following their two-day meeting, estimates suggested that a narrow majority, 10 out of 19 policymakers, supported lowering interest rates by at least another half-point in the two remaining sessions in 2024.
How does this affect traders and investors?
The Federal reserve rate drop may increase demand for cryptocurrencies, potentially raising their value as people seek bigger profits. It may also drive risk-taking, resulting in higher crypto activity, but it may also cause increased market volatility. Additionally, some may see cryptocurrency as a hedge against inflation, driving adoption. So, before investing in cryptocurrency, we recommend that you conduct your study and invest prudently.
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