As a seasoned crypto investor with a decade of experience under my belt, I’ve learned to keep a keen eye on every move the Federal Reserve makes, as their decisions have a profound impact on the cryptocurrency market. The latest comments from Fed officials, specifically from Governor Christopher Waller, have caused quite a stir in the crypto community.
Based on my extensive experience following financial markets and the cryptocurrency space specifically, this week’s comments from Federal Reserve officials carried immense weight for crypto investors like myself. These remarks had the power to shape market trends and potentially impact our portfolios significantly.
On Wednesday, during a speaking engagement at the Federal Reserve Bank of Kansas City, Governor Christopher Waller hinted that potential reductions in interest rates could be forthcoming if inflation and employment trends remain unchanged.
According to Waller, there’s a strong possibility that interest rates may be reduced soon. However, he emphasized the importance of keeping a close eye on the data before making a definitive decision.
Based on Waller’s expressions, it seems uncertain that the Federal Open Market Committee will reduce rates during their upcoming meeting this month. However, there is a greater probability of a rate reduction in September.
Waller presented three possible scenarios for the upcoming days: one where inflation data continues to improve significantly, leading to a potential interest rate reduction in the near term; another where inflation figures show some volatility but still suggest a moderating trend; and lastly, where inflation unexpectedly surges, necessitating a policy tightening by the Fed. He considers the third possibility, of a sudden increase in inflation, to be the least probable.
Based on my extensive experience in financial markets and having closely followed the Federal Reserve’s monetary policy decisions for years, I believe Jerome Powell’s recent statement signals a shift in the central bank’s approach. In the past, the Fed has generally kept interest rates steady until inflation reached or even exceeded its 2% target before making any cuts. However, with the global economic landscape becoming increasingly uncertain, Chair Powell seems to be signaling that the Fed may take proactive measures to stimulate growth, even if inflation remains below the target. This is a departure from traditional monetary policy, but given my observations of market trends and geopolitical risks, I think it’s a necessary response to maintain economic stability.
Crypto market reacts
At the present moment, the crypto market is showing contrasting results as some cryptocurrencies are experiencing price drops.
It’s highly uncertain that the Federal Reserve will lower interest rates in July. However, the probability is rising that they will make a rate cut in September. The chance of a rate reduction in July stands at under 5%, but the likelihood of a September cut is over 90%.
Currently, Bitcoin has experienced a decrease of 0.64% over the past 24 hours. Many other cryptocurrencies have also reported losses, ranging from 2% to 11%. Shiba Inu and the WRX token have suffered substantial losses exceeding 9%, likely due to the recent WazirX hack incident.
As a researcher studying the cryptocurrency market, I’ve observed some noteworthy price movements over the past day. Specifically, Dogwifhat (WIF) has experienced a significant surge, rising by 12%, while Thorchain (RUNE) has also seen an uptick of 7%.
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2024-07-18 15:31