The latest interest-rate decision from the FED meeting today is scheduled for 7 p.m. UTC, followed by a speech with Fed Chair Jerome Powell at 7:30 p.m. UTC.
Federal Reserve officials will likely cut borrowing costs for a third straight meeting this week, but signal a more cautious approach to future rate cuts in 2025. The US economy has been more resilient than people were expecting just a few months ago. Recent data showed inflation is cooling more slowly than expected and a labor market stronger than feared.
Investors are closely watching any comments from Powell for market direction, as lower Federal Reserve interest rates have historically supported the rise of risk assets like cryptocurrencies. Conversely, signals of fewer rate cuts or concerns about persistent inflation could dampen market sentiment.
Fed Expected to Cut Interest Rates for Third Straight Meeting Today
The Fed meeting today regarding the latest Federal Reserve interest rate decision is set for 7 p.m. UTC today, followed by a speech and press conference with Fed Chair Jerome Powell at 7:30 p.m. UTC.
Economists broadly expect the Federal reserves to cut rates for a third straight meeting, which would lower the federal funds rate to a target range of 4.25% to 4.5%. A 25-basis-point rate cut would extend the total reduction to one full percentage point since September, after earlier cuts of 0.5 and 0.25 percentage points in September and November, respectively.
Bitcoin price fell early on Wednesday, retreating from a record high set earlier in the week, as investors’ focus now shifts to the upcoming Fed meeting today. It is now question whether the Bitcoin rally will continue further even after Powell’s speech.
At the time of writing, the price of the world’s largest cryptocurrency was down 2.99%, trading at $103,450. Bitcoin reached an all-time high of $108,267 Tuesday afternoon, making this the second consecutive day the cryptocurrency has set a new record.
The CME FedWatch Tool puts the probability of a 25-basis-point rate cut at 95.4%, with only a 4.6% chance of the rates being left unchanged. This has slightly readjusted from yesterday when the probability of a rate cut stood at 98%.
Ethereum price has taken a similar hit: down 2.34%. In total, crypto market capitalization today stands at about $3.62 trillion and fell 3.21%.
Bitcoin had fallen back to 103,000 dollars from a high of 108,000 dollars on Tuesday in a broader decline in altcoins. Ripple (XRP), Solana (SOL), Dogecoin (DOGE) and Binance Coin (BNB) all register slight losses.
Powell’s Dot Plot in Focus: Crypto Markets Await Fed’s 2025 Rate Projections
Cryptocurrencies were higher on Tuesday, after Ripple announced the launch of its new stablecoin, RLUSD. Bitcoin’s recent rise has been growing on bets on more crypto-friendly regulation with the incoming Trump administration.
On Wednesday, however, the rally ran out of steam as investors became cautious ahead of the Fed meeting today. Cryptocurrencies are generally very risky investments that usually flourish when the Fed is cutting rates.
With predicted 25-basis-point reduction, the publlic is expecting Jerome Powell to indicate potential easing in the monetary cycle for 2025.
Greg Daco, chief economist at EY, noted that main thing for Powell’s decision is to weigh the need for a 25-basis point rate cut. It should be weighed against the robust set of economic and inflation projections. Another focus of Federal Reserves meeting will be on its updated “dot plot,” which plots federal fund rate projections.
In September, policymakers forecast two additional rate cuts in 2024 and four lower cuts in 2025. However, recent inflation reports and officials’ cautious comments have called into question the 2025 projections. The Fed meeting today is likely to drive market expectations on the course of US monetary policy for the next year. Meanwhile, SPDR S&P 500 ETF Trust trades in the negative, down 0.41% .
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