cryptocurrency As the market abandons its upward trend to a slight downward trend, attention is on the FOMC meeting to be held in the USA. While the meeting will take place today in the evening hours of TSI, expectations are that current interest rates will be maintained. However, the real expectation will be what expectations the FED will present for next year. Here are all the developments known so far.
According to market experts, the strong labor market and current inflation will ultimately lead to a cautious approach. However, the general expectation is still on the possibility of an interest rate cut in 2024.
As we reported as Koinfinans.com, US CPI data decreased to 3.1% in November, in line with expectations.
Gargi Chaudhuri, an expert at BlackRock, also reminded of the developments in the economy and stated that he expected a “pause” message from the Fed and suggested it. However, markets see the probability of a cut in interest rates as over 50% as of May. Morgan Stanley strategists, on the other hand, have a calmer attitude and predict that the first discount will come in June 2024.
Contrary to market expectations, Fed Chairman Jerome Powell is expected to adopt a hawkish tone at the FOMC meeting press conference. Glemede’s Jason Pride suggests that Powell may emphasize that it is too early to consider rate cuts and underscore the possibility of additional hikes.
How Will the Cryptocurrency Market React to the FOMC Decision?
While speculations regarding the FOMC meeting continue, indicators indicate that interest rates will continue to be kept constant in the range of 5.25-5.50%. In particular, the Fed’s recent meetings in November and September reinforced this stance by emphasizing the need for economic evaluation before any adjustments.
Higher interest rates often cause withdrawals from risk-based assets. However, the CME FedWatch tool underscores the prevailing sense of stability by predicting a 98.4% probability that the Fed will maintain its current interest rate.