Federal Reserve FOMC Statement: Near-zero interest rates at least until the end of 2023, calls on Congress to push for stimulus package

The Federal Reserve of the United States had previously announced to maintain near-zero interest rates of 0 – 0.25%, without specifying a definite period. According to the official press release on September 16, the Federal Reserve stated that they "expect to maintain an accommodative stance of monetary policy," consistent with previous statements, adopting a 2% flexible average inflation target unconstrained by a formula, and anticipate that near-zero interest rates will be maintained at least until the end of 2023.

Dow Inches Up, Tech Stocks Lead Decline

Following the conclusion of the Federal Open Market Committee (FOMC) meeting in September, the market seemed unsurprised by the Federal Reserve's decision to maintain its negative interest rate policy, providing little boost to the U.S. stock market. While the Dow Jones Industrial Average rose by 0.13%, the Nasdaq and S&P 500 indices both experienced declines.

The Federal Reserve's press release stated:

In its long-term goals, the Federal Reserve aims to maintain inflation and employment rates at 2%. Therefore, it plans to achieve an inflation rate above 2% for a period of time to reach an average long-term target of 2%. Until these goals are met, the Fed will maintain an accommodative monetary policy stance, with the current labor market conditions aligning closely with the Committee's assessment.

Bitcoin Still Tied to Traditional Assets

Many traditional finance professionals believe that in a scenario of prolonged devaluation of fiat currency, the public will seek "safe-haven assets" to hedge against it. For the crypto community, Bitcoin is the obvious choice for such an asset. Recently, Nasdaq-listed company MicroStrategy announced that it has made Bitcoin its primary reserve asset, currently holding 38,250 BTC, with an investment amounting to $425 million.

Moreover, former Prudential CEO George Ball stated in mid-August that "Bitcoin or other cryptocurrencies may soon become a hedge and be sought after." The endorsement of Bitcoin by Wall Street legend investor Paul Jones in May injected further confidence into Bitcoin.

However, despite the recent increase in correlation between Bitcoin and gold, it still exhibits a high positive correlation with traditional assets like the S&P 500 index.

It is reported that discussions in the U.S. Congress regarding a new round of stimulus package have been progressing slowly without reaching a consensus. Therefore, the Federal Reserve emphasized that it is not out of ammunition, as there are still plenty of tools such as lending facilities and balance sheet measures to stimulate the economy, urging Congress once again to assist.