As a seasoned researcher with over two decades of experience in financial markets, I’ve witnessed numerous monetary policy shifts and their ripple effects on various asset classes. The Fed’s decision to lower interest rates by 50 basis points is indeed significant, considering it’s been nearly two years since the last cut.
On Wednesday, the Federal Reserve decided to reduce interest rates by a significant 0.5%, which is equivalent to half a percentage point. This is their first reduction since March 2020 and signals a change in their monetary policy strategy.
At a press conference after the decision, Federal Reserve Chairman Jerome Powell stated that starting to ease the Fed’s unprecedented tightening policy with a significant step, while the American economy remains robust, can assist in reducing the probability of an economic slowdown.
As a crypto investor, I’m aiming for an economic scenario where price stability is reestablished without the harsh impact on employment that inflation sometimes brings. That’s my objective, and I believe today’s action is a clear demonstration of our unwavering determination to reach that goal, as Powell clearly expressed.
Yet, Powell made it clear that he wouldn’t lock the Fed into the same speed moving forward, emphasizing that any future decisions would depend on the economy’s progress in the upcoming months.
Powell expressed that one shouldn’t assume, “This is the new speed we’re moving at,” he said. Instead, the economy may progress at varying paces, potentially causing us to quicken or slow down our pace.
Crypto market reacts
As a crypto investor, I’ve observed an uptick in Bitcoin‘s price, reaching a three-week peak, coinciding with a spike in US equities futures. This bullish trend seems to be the aftermath of the Federal Reserve’s significant interest rate cut, creating waves across various markets. At the moment I’m writing this, Bitcoin has surged 4.31% over the last 24 hours, placing it at $62,336, and it has seen an 8% increase in value over the past week.
Various digital currencies experienced increases: Ethereum (ETH), Solana (SOL), Cardano (ADA), and Shiba Inu (SHIB) rose by 5% to 8% within the past day. Meanwhile, SUI, TAO, Dogwifhat (WIF), Celestia (TIA), SEI, and FLOKI posted gains between 10% and 24%.
Market analysts predict that the Federal Reserve could potentially increase rate cuts by 0.7 percentage points at their November and December meetings. This suggests a more aggressive approach compared to what policymakers have suggested so far. However, Fed Chair Jerome Powell made it clear that any future decisions will be based on economic data rather than committing to a specific pace.
However, the crypto market seems to ignore this nuanced outlook, as several cryptocurrencies have added to their gains in the last 24 hours.
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2024-09-19 15:23