As we draw near to the FOMC meeting scheduled for January 2025, the upcoming Federal Reserve interest rates decision has become a crucial point of focus within the cryptocurrency community. Lately, there have been signs indicating that this decision may not yield favorable outcomes for the crypto market.
FOMC Meeting Date And What To Expect
According to the Federal Reserve’s schedule, the scheduled dates for the FOMC meeting in January are the 28th and 29th. At the conclusion of these two days, the Federal Reserve is expected to make an announcement regarding its decision on interest rates.
In the cryptocurrency world, everyone is eagerly awaiting the upcoming Federal Reserve meeting. They want to find out if the U.S. Central Bank will persist with its Quantitative Easing (QE) strategies, which it initiated last year and reduced interest rates by three cuts in 2024.
At the FOMC meeting in December 2024, the Federal Reserve opted for a reduction of 0.25% (or 25 basis points) in interest rates. This move was seen as positive by the crypto market. However, Federal Reserve Chair Jerome Powell’s speech indicated that the committee maintained a more cautious stance (hawkish) despite making the decision to cut rates.
Ever since, there’s been a great deal of anticipation within the cryptocurrency world regarding the upcoming FOMC (Federal Open Market Committee) meeting. Several recent events hint at the possible direction of the Federal Reserve’s interest rate decision for this month.
As an analyst, I’m reflecting on the robust December nonfarm payrolls figure, which soared to 256,000. This substantial US job growth has sparked speculation among traders that the Federal Reserve will maintain current interest rates. Delving into CME FedWatch data, it reveals a high likelihood of this prediction coming true, with a probability of approximately 93.6% for the Fed to keep interest rates steady.
Currently, traders are placing their wagers against an interest rate reduction from the Fed during the initial half of this year. On the contrary, they foresee a single rate cut taking place over the entire year, with that adjustment anticipated to occur in October.
What It Means For Bitcoin And The Crypto Market
If the Federal Reserve decides not to adjust interest rates during its upcoming FOMC meeting, this could be bad news for Bitcoin and other cryptocurrencies. The value of Bitcoin suddenly dropped to around $92,000 immediately after the release of the nonfarm payrolls report, which makes it less likely that the Fed will lower rates at their next meeting in January, potentially restricting Bitcoin’s price growth.
Maintaining interest rates at their current levels might foster a sense of caution among investors, making them lean towards safer investment options rather than high-risk assets such as cryptocurrencies.
What To Watch Out For Before The Fed Meeting
Before the upcoming Federal Open Market Committee (FOMC) meeting in January, it’s essential to monitor the PPI and CPI inflation figures closely. The Producer Price Index (PPI) data is scheduled for release on January 14, while the Consumer Price Index (CPI) data will be disclosed a day later, on January 15.
At the upcoming January meeting, it’s clear that the inflation data, particularly with the PPI predicted to increase by 3.0% YoY and the CPI projected to reach 2.8%, will likely impact the Federal Reserve’s interest rate decision.
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2025-01-12 21:12