Markets are awaiting the Federal Reserve's decision on interest rates, which will significantly impact the volatility of cryptocurrencies. Investors are focusing on comments from Fed Chair Jerome Powell and long-term forecasts.
Fed Rate Decision and Crypto
According to the latest CME FedWatch data, the probability of a 50 basis point rate cut stands at 61%. Analyst Illia Otychenko emphasizes that the focus should be on the Fed’s forward guidance rather than the rate cuts themselves. Although markets expect a 50 basis point cut, Jerome Powell’s remarks on future monetary policy actions will likely trigger the primary volatility.
Historic Fed Meeting
For the first time in four years, markets are divided entering the first rate cut, with a 50 basis point cut probability priced at 60%, the most uncertain level in over 15 years. Nevertheless, only 9 out of 114 economists surveyed by Bloomberg expect a 50 basis point cut, while 113 firmly predict a 25 basis point reduction.
Future Prospects for Cryptocurrencies
In the medium to long term, if a recession is avoided, a reduction in rates could signal bullish prospects for cryptocurrencies. However, given the ongoing weakness in investors’ risk appetite, short-term expectations do not appear optimistic. In just a few hours, a historic decision will be made, and members will share their three-year interest rate expectations.
The upcoming Fed interest rate decision and its aftermath will significantly impact the cryptocurrency market. Stay tuned for updates and analysis on this important event.
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