Fed Holds Rates at 3.75% to 4% in Split Vote as Bitcoin Swings
Key Facts
On October 28, the Federal Reserve kept its target range for the federal funds rate at 3.75% to 4%, in a decision approved by a 10-to-2 vote. Lisa Cook and Beth Hammack dissented, preferring a quarter-percentage-point increase, according to the committee statement. The hold followed a quarter-point rate hike at the September meeting, when the decision was unanimous, making this month’s split vote the most notable feature of the October decision. In its statement, the committee said economic activity “continues to expand at a solid pace” and inflation “remains elevated.” It added that gathering more information would help it determine the appropriate policy stance to ensure inflation returns to its 2% target in a timely manner.
The September decision raised the range by a quarter point to its current level and was approved by a 12-to-zero vote. In October, the two dissenting members favored another increase of the same size, while the majority supported leaving the range unchanged. The difference between the two votes shows that the committee did not unanimously agree on the next step, even as it kept the interest rate at its current level. The October statement tied the decision to the need for additional information before determining the appropriate policy stance. The committee affirmed that its goal remains returning inflation to its 2% target in a timely manner.
Bitcoin traded in a volatile range during the October 28 session, though the price sequence alone does not establish that the Fed decision caused the moves. News.Bitcoin.com reported that it briefly peaked at $81,687, then fell below $80,500 before the decision. In the minutes after the announcement, it returned to $81,000, according to the report. But EL7’s daily closing data put the price at $80,832 on October 28, compared with $80,909.77 on October 27. Those closes show a limited daily decline, while the intraday prices cited in the report reflect different points in the session.
Bitcoin had risen during Asian and European trading before its gains narrowed. Investing.com reported that it was up 0.3% at $80,553.5 at 10:57 a.m. Eastern Time on October 28, after reaching $81,826 earlier in the session. In Bloomberg’s account published via Swissinfo during the U.S. session, the cryptocurrency was down 0.2% at $80,526.37, while the 10-year U.S. Treasury yield stood at 5.00% and was little changed. The price readings varied by the time they were recorded, but all showed a retreat from earlier session levels. Ahead of the decision, the same report projected that Bitcoin would lose 3.2% in October, which would make it the second consecutive October in which the cryptocurrency posted losses.
Bitcoin had been on a declining path in the few days before the meeting. EL7 reported a close of $80,150.56 on October 26, two days before the decision, followed by daily closes of $80,909.77 on October 27 and $80,832 on October 28. These figures place the day’s move within a series of closes clustered around $80,000. The brief rise to $81,687 and subsequent return to $81,000 were intraday readings cited in the market report, not the daily closing price. The description of the session’s trading therefore differs from the closing figure recorded in EL7’s data.
The U.S. Bureau of Economic Analysis scheduled the advance estimate of third-quarter gross domestic product and September personal income and outlays data for October 29 at 8:30 a.m., according to its official calendar. The releases are the next economic milestone after the Fed’s October 28 decision. The next Federal Open Market Committee meeting is scheduled for December 8 and 9 and will include the release of the Summary of Economic Projections. The Fed’s calendar had set the October meeting for 2:00 p.m. Eastern Time, followed by a news conference with the central bank’s chair at 2:30 p.m. Markets will therefore turn from U.S. economic data the day after the decision to the next meeting and its accompanying economic projections in December.