The Federal Reserve kept interest rates unchanged at the conclusion of today's policy meeting. The decision, which was widely expected, keeps the target range for the federal-funds rate at 5.25-5.50%.
Officials see the central bank keeping monetary policy tighter next year than Wall Street had expected. The median forecast in Federal Open Market Committee members’ latest Summary of Economic Projections has the federal-funds rate ending 2024 at 4.6%. Investors expected significantly more cuts in 2024.
Important quotations from Powell's speech:
"IT IS NOT LIKELY WE WILL HIKE FURTHER."
"THERE WAS A GENERAL EXPECTATION THAT RATE CUTS WILL BE A TOPIC OF CONVERSATION GOING FORWARD."
Rate cuts are a major bullish narrative for Bitcoin and crypto for 2024, along with the Bitcoin ETF approvals and the Bitcoin Halving, which is currently projected to occur on April 17th.
I have been saying all year that the FED has no choice but to pivot in the near future due to the extreme pace of the rate hikes and the strangle hold they have put on the economy.
KEEP IN MIND
Historically, the first period of shifting from QT (quantitative tightening aka rate hikes) back to QE (quantitative easing aka rate cuts) has corresponded with an initial CRASH in the stock market.
However, overall this would be BULLISH for assets.
The strength of the stock market and Bitcoin under the fastest rate hikes IN HISTORY has been notable during 2023. Once there is TONS of low interest money floating around in the market again, it is highly likely this puts gas on the fire.
It is HIGHLY likely that both the S&P and Bitcoin make a new all time highs in 2024.