which stated at the conclusion of its two-day meeting that it will "soon be appropriate to raise the target range for the federal funds rate."
The latest Fed decision comes as the central bank has been winding down
its asset-purchasing program.
Monetary stimulus has been an important source of market support,
which underpinned the rise in both equities and cryptocurrencies over the past year.
BTC reversed earlier gains shortly after the Fed announcement on Wednesday.
Analysts remain skeptical, noting the recent bounce occurred on low conviction among buyers.
"Short-positioned traders are dominating the derivative market.
This indicates that bitcoin's bounce was driven by [the spot market] rather than derivatives,
which is confluent with the significant bidding seen on Coinbase,"
Marcus Sotiriou, analyst at the UK-based digital asset broker GlobalBlock, wrote in an email to CoinDesk.
Central bankers left rates unchanged at near-zero — where they have been set since March 2020 — but the statement after their two-day policy meeting laid the groundwork for higher borrowing costs “soon.”
Jerome H. Powell, the Fed chair, said officials no longer thought America’s rapidly healing economy needed so much support, and he confirmed that a rate increase was likely at the central bank’s next meeting.
“I would say that the committee is of a mind to raise the federal funds rate at the March meeting, assuming that the conditions are appropriate for doing so,” Mr. Powell said.
While he declined to say how many rate increases officials expected to make this year, he noted that this economic expansion was very different from past ones,
with “higher inflation, higher growth, a much stronger economy — and I think those differences are likely to be reflected in the policy that we implement.”
