FOMC review

On Tuesday and Wednesday was held the first FOMC meeting of 2023. The importance of this meeting comes after the current rally we witnessed in crypto with most cryptocurrencies going up 30% and even more from the lows.

Biggest takeaway:

• The FED hicked rates by 0.25 bps (which was expected)
• The labor market is still going strong despite the recurring tech layoffs we have been witnessing in the past 3 to 6 months.
• Inflation stabilized but remains elevated
• The FED also announced that if the economy is still doing great they won't be cutting rates in 2023

The 25 bps rate hike just tells us that the fed will keep raising rates in the near future at least the next meeting before either halting this increase or adjusting to the state of the economy at this point in time.

We also learned that the most important matrix used to evaluate the current state of the economy is the labor market and that the FED is monitoring it closely.

In addition, the FED will continue reducing its holding of treasuries and other securities as described previously.

Overall Powel stance today could be considered somewhat dovish considering everything else happening in the economy, but he was very clear that there can be even more restrictive behavior from the FED if needed.