Fed Wraps Up Meeting Today After Quarter-Point Rate Hike in September
Key Facts
The Federal Reserve concludes its policy meeting today, October 28, after a meeting that began yesterday, amid broad expectations that it will leave interest rates unchanged. The Associated Press said investors and economists expected rates to hold steady at the October meeting, while anticipating another increase at the December meeting. The meeting follows the central bank’s September increase of its target range by a quarter percentage point to 3.75%–4.00%. Policymakers now face a new decision after the first tightening move since September, as investors await the Fed’s guidance on the rate path. Minutes of the October meeting are scheduled for release on November 18, offering details of the deliberations.
The Fed said in a September 16 statement that the committee had decided to raise the target range for the federal funds rate by a quarter percentage point, to 3.75%–4.00%. The previous decision came before the October meeting, scheduled for October 27 and 28 according to the Federal Open Market Committee calendar. The Associated Press, meanwhile, reported that holding rates steady was the prevailing expectation among investors and economists ahead of the meeting. The agency said participants viewed the previous move as “a first step toward a renewed effort to bring down inflation.” This backdrop places the October decision in the context of balancing the path to lower inflation against earlier decisions to tighten monetary policy.
According to a Coinbase Institutional report dated October 23, sources of demand for bitcoin have shifted since August, with U.S. spot exchange-traded funds attracting about $6.4 billion, compared with about $1.5 billion for corporate treasuries. The company said treasuries were the main source of demand in the first half of the year before the roles reversed. Coinbase estimated that the $80–82 thousand range represents near-term support, with the funds’ average cost basis near $81.3 thousand and the 50-day moving average near $81.7 thousand. It said the two levels overlap within the support range it identified. The report places these indicators in the market backdrop ahead of the Fed decision, without establishing a specific price move on the day of the meeting.
Coinbase estimates point to potential supply above the nearby prices discussed in its weekly report. It said about 2.1 million bitcoin last changed hands between $87.5 thousand and $91.7 thousand, an amount it described as about one-tenth of total supply. In its fourth-quarter report published on October 7, it said about 1.7 million bitcoin last changed hands between $89,600 and $93,700. The report linked this range to potential overhead supply in assessing market levels. It also recorded that bitcoin rose 43% in the third quarter to $83.6 thousand, despite the Fed resuming tightening, while constrained liquidity remained a drag on the upward trend.
Markets are also looking ahead to the December meeting: Coinbase said interest-rate futures on October 23 priced in a probability of about 80% of a rate increase at that meeting. The Associated Press report also said investors and economists expected another increase in December, alongside their expectation that rates would hold at the October meeting. The Fed’s next regular meeting is scheduled for December 8 and 9, according to the calendar published on its website. Minutes of the October meeting are scheduled for release on November 18. These dates and upcoming events remain milestones for tracking monetary policy after this week’s meeting.