The US Federal Reserve is expected to raise the federal funds rate by between 0.25% and 0.5% when it meets on 2-3 May. The CME Fed Watch tool currently predicts a 0.5% interest rate hike with a 72% likelihood of at least a 0.25% increase. The move is expected thanks to a prolonged period of strength in US job markets, with 236,000 jobs created in March and an unemployment rate of 3.5%. It is unclear how the rate raise could affect Bitcoin and cryptocurrency markets, which surged by 7% when the news of the ultimate decision was made public. If stocks react negatively to the Fed’s announcement, cryptocurrencies could be similarly affected. However, Bitcoin has remained relatively stable throughout this month, even as other financial markets have experienced volatility.
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