Crypto Market Awaits Fed Decision, Powell’s Statement; What to Expect

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As a seasoned researcher with years of experience navigating the turbulent waters of financial markets, I find myself bracing for the upcoming storm that is the Federal Reserve’s final meeting of the year. My life has been peppered with such events, and I’ve learned to read between the lines in these situations more than my morning newspaper.

There’s a lot of excitement building up in the world of digital currencies as we approach the upcoming Federal Reserve decision and remarks from Chairman Jerome Powell, which are expected later this week.

This week, the last gathering of the U.S. Federal Reserve for the year is scheduled to take place. The Federal Open Market Committee’s meeting, happening on Tuesday and Wednesday, is particularly significant to investors as they anxiously await the anticipated final interest rate adjustment of the year.

During the coming week, various economic figures will be disclosed, such as retail sales data for November on Tuesday, the number of new unemployment claims for a week and the Gross Domestic Product (GDP) growth rate for the third quarter on Thursday.

By this coming Monday, it was estimated that there was a 97% probability of a 0.25 percentage point reduction in interest rates. Investors will be attentive to the revised policy statement from the Federal Reserve and Jerome Powell’s press conference on Wednesday for insights into future rate adjustments.

Currently, there’s a silence period in effect at the Federal Reserve, implying that committee members can’t publicly share their thoughts before the Federal Open Market Committee (FOMC) gathering takes place.

What to expect?

In simpler terms, if the Federal Reserve reduces its interest rates and Jerome Powell’s remarks are viewed favorably, it could lead to a positive reaction in the cryptocurrency market. This is because lower interest rates often encourage investors to take on more risk in search of better returns, which may include investing in cryptocurrencies.

Instead, if Powell’s statement implies a more gradual reduction in rates or a smaller decrease than anticipated, the market could respond negatively. Worry about prolonged inflation and a sluggish rate cut schedule may dull investors’ optimism.

During today’s trading, the cryptocurrency market shows a blend of rising and falling prices. Notably, Bitcoin has just reached a fresh record peak.

As reported by CoinMarketCap, Bitcoin’s price climbed 1.41% daily to $103,926, having hit a new peak of $106,554 during early Monday trading sessions. Ethereum followed suit with a 1.62% increase over the past 24 hours, reaching $3,951. Most cryptocurrencies saw declines; XRP, Shiba Inu, Toncoin, and BONK dropped between 2% and 4%, while SUI, BGB, Fantom, and RUNE registered gains of between 4% and 15%.

In simpler terms, the consequences of the Federal Reserve’s actions and Chairman Powell’s observations could influence the market’s behavior over the next few days.

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2024-12-16 19:25