This week, the US Federal Reserve is set to announce a 25bps rate cut on December 18, marking the second such move in 2024. This decision is expected to have implications for the crypto market.
Federal Reserve’s Rate Decision
In September, the Federal Reserve introduced its first rate cut of 2024, setting the target rate between 4.75% and 5% due to a weakened job market. In October, the Initial Jobless Claims index dropped from 260,000 to 242,000. The Fed is expected to announce another 25bps rate cut on December 18, with CME assigning a 93.4% chance of this outcome.
Impact of Rate Cut on Cryptos
Since September's rate cut, the crypto market has grown by 71.77%, with the market cap of all cryptocurrencies outside the top ten increasing by at least 87.16%. Bitcoin saw growth rates of +11.2% in October and +37.4% in November, while Ethereum recorded a negative -3.16% in October but rebounded with a 47.4% growth in November. Experts predict that the upcoming rate cut will further positively impact the crypto market, as Bitcoin and Ethereum have grown by 2.3% and 1.9%, respectively, in the past 24 hours.
Key Economic Events for Investors
On December 19, the US GDP Growth Rate Final and the US Core PCE Prices Final are set to be released. The GDP growth rate was 1.6% in the first quarter of 2024 and rose to 3% in the second quarter, with a further expected drop to the 2.8% range. TEForcast supports this consensus. The PCE Prices index was at 3.7% in the first quarter and declined to 2.8% in the second, with predictions placing it at 2.1% this time.
This week is pivotal for the US economy and the crypto market, with the Fed's rate decision and key economic indicators like GDP and PCE Prices poised to impact market trajectories.
