Bitcoin Magazine

Bitcoin Price Trades Above $81,500 as Fed Keeps Rates Steady in Split Vote

The Federal Reserve left its benchmark rate unchanged Wednesday, holding the federal funds target range at 3.75% to 4%. The bitcoin price showed some volatility around $81,000.

The decision passed 10-2, and the dissents carry as much weight as the outcome. Governor Lisa Cook and Cleveland Fed President Beth Hammack wanted a quarter-point increase. It is the first time since 1992 that a Fed governor and a regional bank president have dissented together on the same side.

Fed Chair Kevin Warsh faced reporters after the vote and said politics played no role in the decision, days before the midterm elections. Warsh has said he does not favor forward guidance absent a crisis, which leaves investors to read the data themselves. 

The committee’s statement dropped its earlier language about when a hike might support a return to 2% inflation. In its place is a line saying more information will guide the policy stance. The Fed also described growth as strong, up from solid.

The signal points toward tightening. Fed funds futures and the Fed’s own dot plot lean toward a rate increase by December, and some pricing puts the odds near three in four. Inflation has been running hot, and the two dissenters are the officials who want to act on it.

Bitcoin price’s reaction was restrained. The bitcoin price spiked to about $81,700 in the minutes after the announcement, fell below $80,500, and then recovered toward $81,000.

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