How upcoming FOMC meeting will impact Shiba Inu holders’ portfolio
January 29, 2023
By Michael Nderitu
A look at how the upcoming FOMC meeting will influence the Shiba Inu demand.
Bullish bias forming but investors still moving with caution in anticipation of final results.
The Shiba Inu community is undoubtedly pleased with SHIB’s performance in January. But now that the month is coming to its conclusion, a sense of uncertainty has returned to the market, especially in regard to its performance in February.
The upcoming FOMC meeting will likely have the biggest impact on Shiba Inu holders’ portfolios.
A good understanding of what the FOMC meeting is will allow Shiba Inu holders to better understand how it influences their portfolio.
Well, for starters, the meetings are held once every three weeks and one of the key highlights is the revision of the Federal Fund rate. The latter is the rate at which banks borrow from the Federal Reserve.
The link between the FOMC and Shiba Inu price action
The Federal Reserve uses the Federal fund rate as a tool for balancing the economy. A lower rate means it is cheaper to borrow, making it easier for people to access liquidity and thus an easier investment environment.
On the other hand, a higher rate makes borrowing less appealing and discourages investment.
The Federal fund rate has been rising for the most part in 2022 as part of the FED’s quantitative tightening measures to curb inflation.
Shiba Inu and the rest of the market experienced a bullish surge after the last FOMC meeting. This is because the FED only increased interest rates by 0.5% or 50 basis points compared to 0.75% or 75 basis points in the previous month’s announcement.
The market interpreted the lower FFR as a sign that the FED was easing off its aggressive rate hike. This was also accompanied by reports that the FED was seeing positive results in its battle against inflation. The next FOMC meeting is scheduled to take place on 31 January and 1 February.
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