Cryptocurrencies remain muted early on Thursday amidst markets digesting the full import of the discussions at the recent FOMC. The FOMC minutes released on Wednesday revealed a longer than expected period of high interest rates. The minutes has specifically noted that none of the participants anticipated that it would be appropriate to begin reducing the federal funds rate target in 2023.
With inflation remaining unacceptably high, participants of the FOMC expected that a sustained period of below-trend real GDP growth would be needed to bring aggregate supply and aggregate demand into better balance and thereby reduce inflationary pressures. Participants also concurred that though the inflation data received for October and November showed welcome reductions in the monthly pace of price increases, it would take substantially more evidence of progress to be confident that inflation was on a sustained downward path.
The Minutes also revealed the participants agreed that inflation remained well above the Committee’s longer-run goal of 2 percent, while the labor market remained very tight, contributing to upward pressures on wages and prices. In view of the persistent and unacceptably high level of inflation, several participants commented that historical experience cautioned against prematurely loosening monetary policy.
A number of participants also emphasized that it would be important to clearly communicate that a slowing in the pace of rate increases was not an indication of any weakening of the Committee’s resolve to achieve its price-stability goal or a judgment that inflation was already on a persistent downward path.
The Minutes has not been a soothing reading for markets which have been increasingly restless at the high interest rates. The persistence with the agenda of inflation-combat tempered hopes of a policy pivot any time soon.
The Dollar Index, a measure of the Dollar’s strength relative to six currencies rose is currently trading at 104.28, up 0.03 percent on an overnight basis.
Overall crypto market capitalization is at $819 billion, almost the same level as a day earlier.
Bitcoin (BTC) is trading at $16,832.09, having edged down 0.02 percent in the past 24 hours. BTC traded between $16,964.59 and $16,789.75 in the past 24 hours. Bitcoin’s market dominance is currently at 39.6 percent.
Ethereum is trading at $1,252.98, edging up 0.05 percent in the past 24 hours. ETH traded between $1,264.81 and $1,246.21 in the past 24 hours. Ethereum currently dominates 18.7 percent of the overall crypto market.
Among the top 100 cryptocurrencies, 98th ranked Kava (KAVA) is the best performer with an overnight rally of 7.5 percent. 70th ranked eCash (XEC) follows with overnight gains of 7 percent.
47th ranked Huobi Token (HT) is the greatest laggard with an overnight decline of close to 10 percent. 69th ranked Aptos (APT) declined 4.87 percent in the past 24 hours.
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