The Federal Reserve System of the USA (Fed) will announce its interest rate decision this month, which is keenly awaited by cryptocurrency market participants. Current expectations lean towards the idea that the rate will remain unchanged.
Expectations from Fed's Decision
The Fed will announce its interest rate decision on Wednesday, July 30. Currently, the market is pricing in a 97.4% probability that the rate will remain unchanged, while the probability of a 25-basis-point hike stands at just 2.6%.
Potential Consequences of Rate Cuts
Despite the expected decision, crypto analyst Paul Barron noted a small possibility for a surprise cut. If such a move occurs, it may lead to significant gains in stocks, real estate, and cryptocurrencies, particularly Bitcoin and altcoins. He suggests that such measures are generally beneficial for riskier assets like cryptocurrencies.
Risks and Economic Situation
While a rate cut may seem optimistic for financial markets, Barron also points out potential downsides. Major risks include rising inflation and possible signals of economic weakness that could breed consumer insecurity. According to Fed Watch, the Fed is expected to make its first rate cut in September 2025, which is already priced in at 61%.
The Fed's interest rate decision may significantly impact the cryptocurrency market. Uncertainty remains, and how events will unfold will take time to reveal.
