The U.S. Federal Reserve (Fed) announced at 2 a.m. today that it would raise interest rates by 3 percentage points, the largest increase in 28 years. Fed Chairman Powell said after the meeting that the July meeting is most likely to increase interest rates by 2 or 3 percentage points. . In line with market expectations, the four major indexes of and US stocks closed up collectively, and Bitcoin exceeded US$22,000.
The U.S. Federal Reserve (Fed) announced an interest rate hike of by 275 basis points at 2 a.m. Beijing time today (16th). The benchmark interest rate rose to 1.5%~1.75%, the largest increase since 1994. The interest rate level has been higher than that in 2020 levels before the COVID-19 outbreak in March 2019 to curb record high inflation.
Fed Chairman Powell said at the press conference after the meeting: Inflation unexpectedly rose after the May meeting. As a more active response, the Fed decided to significantly raise interest rates, which will help ensure that long-term inflation expectations remain stable. The Fed will be looking for strong evidence of declining inflation in the coming months; at the same time, Powell said that an increase of 50 or 75 basis points is most likely at the next meeting: From today's perspective, an increase of 2 or 75 basis points is most likely at the next meeting 3, continued rate hikes are expected to be appropriate, and the actual pace of change will depend on incoming data and the changing economic outlook.
But he also reassured the market that this 3-digit increase will not become the norm. Powell said that consumers are spending and that although the economy is slowing down (the U.S. economic growth forecast for this year has dropped to only 1.7% from the 2.8% estimated in March), it is still growing at a healthy level. Policymakers remain generally confident in the U.S. economic outlook.
"Overall economic activity fell slightly in the first quarter, but appears to have picked up since then. Employment has grown strongly in recent months, and the unemployment rate has remained low...Inflation remains elevated, reflecting factors related to the pandemic, rising energy prices, and broader "The supply and demand imbalance problem"
According to FedWatchTool data from the Chicago Mercantile Exchange (CME), the market estimates that the probability of the Federal Reserve raising interest rates by 75 basis points at the July meeting is currently 77.8%, and the probability of raising interest rates by 50 basis points. It is 22.2%.
The four major U.S. stock indexes collectively closed higher
The Fed raised interest rates sharply again, in line with market speculation for weeks. Investors seemed to believe that Powell showed a serious attitude in dealing with soaring inflation. U.S. stocks fluctuated higher, and the three major indexes all hit their highest levels on June 2. Best single day performance since.
The Dow Jones Industrial Average rose 303.7 points, or 1%, to close at 30,668.53 points.
The Nasdaq index rose 270.81 points, or 2.5%, to close at 11,099.16 points.
The S&P 500 index rose 54.51 points, or 1.46%, to close at 3,789.99 points.
The Philadelphia Semiconductor Index rose 47.7 points, or 1.77%, to close at 2,737.5 points.
Bitcoin surged 13%, approaching US$23,000
In terms of the cryptocurrency market, Bitcoin was also positively affected. It hit a low of US$20,250 late at night today (16th) and approached the US$20,000 mark. On the occasion of the interest rate hike result 02: After the exposure of 00, a strong rebound started. It was close to US$23,000 earlier, rose nearly 13% in six hours, and is now trading at US$22,702.
Ethereum also started to rebound after being close to US$1,000. By the time of writing, it had rebounded to US$1,246, with an increase of 20% in the past 6 hours.
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