- Interest rates were lowered today because inflationary pressures have subsided.
- However, Interest rates were left steady at 5.25% the day before by the US Fed.
A 25-basis-point reduction in interest rates from 5.25% to 5.0% has been announced by the Bank of England, marking a watershed event. The decision follows expectations, and the British central bank reportedly pulled off this U-turn with a razor-thin majority.
With this move, the wheels are in motion for more liquidity easing. Which is great news for Bitcoin and the whole crypto sector. Next month in September, the Fed is expected to make a similar decision.
Inflationary Pressures Subsided
For the first time since the 2020 COVID-19 pandemic began, the Bank of England has decided to reverse its monetary tightening strategy. Especially, in response to rising inflation. We were able to lower interest rates today because inflationary pressures have subsided, according to BoE Governor Andrew Bailey, who also voted in support of the rate decrease.
On the other hand, he assured the public that the Bank of England would exercise caution in its impending interest rate cuts. However, we must watch inflation closely and use caution while reducing interest rates. So as not to cause inflation to spike. He also said that the greatest way to promote economic development and national prosperity is to keep inflation low.
Interest rates were left steady at 5.25% the day before by the US Federal Reserve. But in his remarks after the FOMC meeting, Powell hinted at the prospect of a rate decrease in September of next month.
In response to the plummeting value of the yen, the Bank of Japan hiked interest rates earlier this week. In contrast, several countries’ central banks, such as Canada’s, have already reversed course and slashed interest rates early this year.
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