Replays · FOMC · 15 Jun 2022, 19:00 UK
Seventy-five basis points, and a reversal during the press conference
The Federal Reserve hadn't raised rates by three-quarters of a point since 1994. On Wednesday 15 June 2022 it did, lifting the target range to 1.50–1.75%. Bitcoin's first reaction was to fall. Its second, about 40 minutes later, was the move most people remember.
The days before
Crypto came into this meeting in poor shape. On 12 June the lender Celsius froze customer withdrawals, and Bitcoin dropped to its lowest level since late 2020. On the Friday before, US CPI had come in hotter than expected, and the possibility of a 75bp hike began to circulate in the press. By the morning of the decision, investors largely expected it. The question was what the Fed would say about the meetings that followed.
- 1 19:00 UK: the statement and the 75bp hike
- 2 19:30 UK: the press conference begins
- 3 From 19:40 UK the price runs from about $21,000 to $22,346 in ten minutes.
Minute by minute
19:00. The statement confirmed the 75bp hike. Bitcoin's first five-minute candle traded between $20,550 and $21,507 and closed 2.2% lower.
19:10. The low arrived at $20,225, about 4% below the price at the time of the statement. For the next 20 minutes the price moved sideways near that level while traders waited for Jerome Powell.
19:30. The press conference began. Powell said a 75bp move was unusually large, and that he did not expect moves of this size to be common. Markets took that as a signal of a ceiling on the pace of hikes.
19:40. The turn came. In ten minutes Bitcoin went from about $21,000 to $22,346, around 6% above the pre-statement price and roughly 10% off the low. By 20:00 it was 2% higher on the hour. Four hours after the decision it was up 5.2%.
- Rate decision
- +75bp
- Upper bound
- 1.00% → 1.75%
- Bitcoin, first hour
- +2.04%
- Bitcoin, four hours
- +5.23%
- Ether, four hours
- +10.1%
Compared with the May meeting
Six weeks earlier the Fed had raised by 50bp and Powell had said 75bp was not something the committee was "actively considering". Bitcoin rose 1.5% in the hour then. The June meeting raised rates by more than that guidance implied, but the market reaction was larger and in the same direction. That underlines the point: what moved prices was guidance about the future path, not the size of the hike already announced.
- 1 The press conference starts at +30 minutes in both meetings.
The bond market agreed. The two-year Treasury yield had risen sharply into the meeting and closed the day at 3.20%, down from 3.45%. That is a big drop for a day when the Fed hiked by the most in almost three decades.
What came next
The rally didn't survive the next day: 24 hours after the decision Bitcoin was slightly below where it had started, and within days it fell under $18,000 as the Three Arrows Capital crisis unfolded. In our 80-meeting history, this one ranks tenth for Bitcoin's first-hour move against a normal hour. The intraday shape is the reason it stands out: a fall on the statement and a recovery on the press conference.
| Market | 5m | 30m | 1h | 4h | × normal hour |
|---|---|---|---|---|---|
| Bitcoin | −1.96% | −1.60% | +2.04% | +5.23% | 4.7× |
| Ethereum | −3.47% | −1.86% | +5.26% | +10.10% | 9.5× |
| Litecoin | −2.57% | −2.13% | +3.37% | +9.74% | 5.6× |
| XRP | −1.18% | −0.18% | +3.86% | +8.35% | 5.8× |
| Chainlink | −3.26% | −1.86% | +6.06% | +11.03% | 9.0× |
| Cardano | −2.93% | −1.29% | +3.09% | +8.08% | 5.8× |
| S&P 500 ETF (SPY) | −0.60% | −0.86% | +0.04% | – | – |
| Nasdaq-100 ETF (QQQ) | −0.84% | −0.93% | +0.19% | – | – |
Change from the 19:00 UK decision time over each window.
Sources: release time and figures from the Federal Reserve's statement and target range (FRED DFEDTARU). Crypto: Bitstamp 5-minute candles; SPY/QQQ: IEX. No consensus forecasts are shown because they are proprietary; comparisons are with the previous release. “× normal hour” compares the first-hour move with the median move in matched quiet hours. How we measure it.