US Federal Reserve encourages Bitcoin rally

At yesterday's meeting, the U.S. Federal Reserve to leave key interest rates unchanged. So the range remains between 5.25 and 5.5 percent. A scenario the market assumed beforehand.

More important than the expected pause in key interest rates were Fed Chairman Jerome Powell's statements. He did not temper market participants' prediction of quick interest rate cuts to the extent many players had assumed beforehand. Instead, he confirmed the market's prediction of interest rate cuts over the next year.

According to Powell, a total of three interest rate cuts are planned by 2024. This confirmed the markets' prediction for more liquidity. Bitcoin and other crypto thus posted strong gains. As a result, the Dow Jones stock index immediately reached a new all-time high. The DAX also opened this morning with a new record high.

The prospect of a looser policy also receives support from the real economy. According to Powell, indicators suggest that economic activity will continue to deteriorate. The same is true for the U.S. real estate sector. From the perspective of investors, this means that the likelihood of further interest rate cuts and measures to increase the money supply is increasing.

So while consumer price inflation continues to fall, asset price inflation may rise significantly again.