The Federal Reserve has increased rates by 0.25 percentage points

The Federal Reserve of the United States has increased its benchmark interest rate by 0.25 percentage points to a target range of 4.75%-5%. As a result, the price of Bitcoin rose approximately $250 to $28,700. The Fed's Federal Open Market Committee (FOMC), in its statement accompanying the rate hike on Wednesday, acknowledged the recent bank system troubles, which are likely to lead to tighter credit conditions and negatively impact economic activity, hiring, and inflation. Interest rate traders were previously divided on whether the Fed would increase rates by 25 or 50 basis points, but the recent banking system issues had caused them to be split on whether the Fed would raise rates or maintain them. The quarterly expectations of Fed members indicate that the median expected terminal fed funds rate remains at 5.1%, and they expect core PCE inflation in December 2023 to be 3.6% compared to 3.5% three months earlier. Fed Chair Jerome Powell will hold a press conference at 3 p.m. ET.