Bitcoin price approaches $27K support level as Federal Reserve maintains interest rates during FOMC meeting.

Bitcoin (BTC) experienced sudden fluctuations on Sep. 20 as the United States Federal Reserve kept interest rates at their highest levels in two decades.

BTC price reacts to Fed rate pause

Data from Cointelegraph Markets Pro and TradingView monitored BTC price movements as it responded to the rate decision and the remarks made by Fed Chair Jerome Powell.

The Federal Open Market Committee (FOMC) chose to maintain rates at the levels established in July of this year.

“The Committee aims to achieve maximum employment and an inflation rate of 2 percent over the long term,” a press release indicated.

“To support these objectives, the Committee decided to keep the target range for the federal funds rate at 5-1/4 to 5-1/2 percent.”

Fed funds rate chart. Source: St. Louis Fed

This decision was largely anticipated by the markets, with a 99% likelihood of a pause in rate hikes already established, according to data from CME Group’s FedWatch Tool.

However, the Fed’s language remained cautious regarding future inflation, with no assurance that conditions would ease.

“In evaluating the appropriate stance of monetary policy, the Committee will continue to assess the implications of incoming information for the economic outlook. The Committee would be ready to modify the stance of monetary policy as necessary if risks arise that could hinder the achievement of the Committee’s objectives,” the release added.

SUMMARY OF FED DECISION (9/20/23):
1. Fed PAUSES rate hikes, leaving rates unchanged
2. 12 Fed officials anticipate 1 more rate hike
3. 7 Fed officials foresee no further rate hikes
4. Fed expects rates to remain elevated for an extended period
5. Fed projects inflation at 2.6% in 2024
Is the Fed pause finally here?

— The Kobeissi Letter (@KobeissiLetter) September 20, 2023

In response, Michaël van de Poppe, founder and CEO of trading firm Eight, indicated that no additional rate hikes would occur in the future, suggesting that Bitcoin would benefit from this situation.

“No rate hike from the FED. My best guess: we’re done with the hiking policy,” part of an X post stated.

“Bitcoin is likely to start trending up from here (yes, a fakeout usually happens at the news).”

Powell suggests another rate hike could occur in 2023

BTC price movements exhibited volatility as the decision was announced, with Powell still delivering his speech at the following press conference at the time of writing.

Related: Bitcoin price all-time high will precede 2024 halving — New prediction

The path to reducing inflation to the Fed’s 2% target, he remarked, had “a long way to go.”

“If the economy develops as anticipated, the median participants project that the appropriate level of the federal funds rate will be 5.6% by the end of this year, 5.1% by the end of 2024, and 3.9% by the end of 2025,” he stated.

Powell noted that the medium projection for the year’s end remained unchanged from previous estimates, but had increased by 0.5% for the subsequent two years.

As a result, BTC/USD continued to stay above $27,000, with no significant movement outside the recent intraday trading range.

This article does not provide investment advice or recommendations. Every investment and trading decision carries risk, and readers should perform their own research before making a decision.