- The Fed has decided to leave interest rates unchanged after a unanimous vote.
- However, policymakers forecast three rate hikes in 2022.
- Bitcoin and top altcoins have bounced on bullish sentiment following the Fed’s decision.
Federal Reserve officials in the United States have decided to leave interest rates unchanged after a unanimous vote at the end of the two-day meeting on December 15. Bitcoin price has climbed over 6% as bullish sentiment has slightly risen.
Fed aims to maintain near-zero interest rates
Policymakers at the United States Federal Reserve have decided to leave interest rates unchanged, keeping them between 0 and 0.25%. According to a statement issued by its officials, the Fed aims to maintain near-zero interest rates until full employment is achieved.
Fed Chair Jerome Powell stated that it remains unclear how much longer labor market shortages will last. He highlighted that the economy has been making rapid progress toward maximum employment, but labor shortages may continue if additional waves of the coronavirus emerge.
The country’s central bank has also doubled the pace of bond purchase tapering by $30 billion a month. According to a CNBC report, the Fed stated that it is committed to using every tool at its disposal to support the recovery of the US economy.
The Fed will be buying $60 billion of bonds starting from January 2022, with completion of the bond-buying program expected to end in mid-March. Officials forecast three rate hikes in 2022 and another three rate hikes expected in 2023.
Powell said that the Fed will not be raising rates until the taper is over.
Bitcoin price secures critical foothold
The largest cryptocurrencies by market capitalization, including Bitcoin and Ethereum, have reacted positively to the news. BTC jumped to over $49,000 after the Fed decision was announced.
Bitcoin price has made a quick recovery, as it has secured a critical foothold above $48,501, where the 38.2% Fibonacci retracement level and 50 four-hour Simple Moving Average (SMA) meet.
BTC/USDT 4-hour chart
If a spike in buy orders occurs, Bitcoin price may even aim to tag the upper boundary of the falling wedge pattern on the 4-hour chart at $49,901. Slicing through this level could put a 12% surge given by the prevailing technical pattern on the radar toward $55,435.
However, if selling pressure rises, the aforementioned foothold would be tested and if it fails to hold, Bitcoin price may slide toward the 21 four-hour SMA at $47,929.