ETH falls as Fed confirms tapering plan

With inflation well above 2% and a strong labor market, the US Federal Reserve (Fed) said it expects it will soon be appropriate to raise the target range for the federal funds rate. The Fed also decided to continue to reduce the monthly pace of its net asset purchases, bringing them to an end in early March.

Notably, the new statement omitted some key details that were there in the last statement, including a mention of the Fed being “committed to using its full range of tools to support the US economy.”

Fed also noted that it would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of its goals.

Asked about the currently high inflation in the US during the press conference following the release of the statement, Fed Chair Jerome Powell admitted that “inflation has persisted longer than we thought.” We will use our tools to ensure higher inflation “does not become entrenched,” Powell said, adding that the Fed might raise rates in March.

Meanwhile, after rallying right after the statement, both bitcoin (BTC) and ethereum (ETH) dropped sharply soon after.

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