The Fed shakes markets: latest situation in gold, dollar and Bitcoin

The US Central Bank (Fed) raised interest rates by 75 basis points yesterday. Gold, stock markets and cryptos rose as markets bought into Fed Chairman Jerome Powell’s remarks that it would be appropriate to slow interest rate hikes at some point.

The US Central Bank (Fed) raised interest rates by 75 basis points at yesterday’s monetary policy meeting. Gold, oil, stock markets and Bitcoin rallied after Fed Chairman Jerome Powell said that ‘it would be appropriate to slow down interest rate hikes at some point’.

The Fed warned yesterday that recent economic data indicate that economic growth was slowing. While the bank increased its policy interest rate by 75 percentage points, the interest rates increased from 1.50-1.75 percent to 2.25-2.50 percent. The expectation of the markets was also at the level of an increase of 75 basis points.

Fed Chairman Powell signaled at a press conference yesterday that he was committed to the goal of bringing inflation under control. Explaining his expectations about the size of the next rate hike, Powell said that ‘at some point it would be appropriate to slow down interest rate hikes’.

Powell’s sentence increased the risk appetite in the market, while the decline in the dollar caused assets such as gold and Bitcoin to recover. After the conversation somewhat calmed concerns that aggressive tightening policies would continue, the dollar lost value against major currencies, while gold, oil, the stock market and cryptocurrencies rose.

The dollar fell to a three-week low against the euro and yen as Fed Chairman Powell calmed concerns that aggressive policy would continue. The dollar index which measures the dollar against six major currencies, fell 0.6 percent in trading after the close of the session yesterday and remained at a horizontal level today, falling to 106.28. The statement did not affect the dollar/TL exchange rate much. The exchange rate was trading at 17.90 in the morning.