We are now on the brink of an important decision from the US Federal Reserve regarding interest rates, which will be announced tomorrow... and the entire market from Wall Street to Binance is waiting to see the next step!
But before we talk about what might happen, we need to understand what is happening around us and why this decision is so important.
🎯 Volatile economy and political pressure.
Inflation is decreasing, yes, but not at the speed the Federal Reserve was hoping for. The latest data (CPI and PCE) indicates that inflation is easing.
The labor market is still relatively strong, but there are signs of a slowdown beginning to show, such as the number of new jobs being a bit lower than expected.
Trump is coming in strong and is pressuring Fed Chairman Jerome Powell, stating frankly that if inflation drops and rates remain the same, "he will have to act!"
👀 The message is clear: lower the interest rates, folks, that's enough. But on the other hand, Powell is not the type to easily bend... he always says we won't lower rates just because of pressure... we will follow the data.
📊 The expectations for the interest rate decision itself.
✅ The most likely scenario is a pause in interest rates.
This is what most of the market is pricing in right now; the Fed sees inflation trending down, but is still not 100% confident.
A pause gives them a chance to monitor the situation more before they start an actual cutting cycle.
❌ A sudden cut, which is unlikely.
This would serve as a positive shock for the markets, but it is currently unlikely to happen unless there is a clear crisis like a bank collapse or very bad economic data.
📈 Raising the interest rates, which is an unlikely scenario.
It would be economic suicide at that moment.
The Fed knows that the market is on the edge, and any further tightening will push us back into recession.
💥 More important than the decision is Powell's tone at the conference!
Focus with me here... the decision itself is important, but what Powell will say in the press conference after the decision is what actually moves the market.
And here are 3 possible scenarios.
🕊️ Powell's dovish tone hints that inflation is under control and cuts are coming soon. The effect of this is that crypto will soar.
⚖️ A balanced tone from Powell indicates we are still monitoring inflation and that there is no cut coming soon.
The market impact is fluctuating slightly with a bit of decline or rise, but no major explosion.
🦅 A hawkish tone from Powell indicates that inflation is still concerning or hints that we could raise rates again.
The market impact shakes, and crypto drops.
💰 Direct impact on the crypto market.
🔸 Major currencies.
Bitcoin is leading the wave; any positive tone from Powell equals a price explosion. A negative tone = violent correction.
ETHEREUM follows Bitcoin but at a ratio.
🔹 Alternative currencies.
Currencies like Solana, AVAX, and MATIC may move violently up or down.
Small currencies may also see significant volatility in movement.
📉 The Fear & Greed Index is currently hovering in the neutral zone, and people are waiting for the decision before moving.
Any positive hint = people will return to greed quickly.
Any warning = people will return to panic and selling begins.
🧠 The market is currently tense... Any word could set the world on fire 🔥.
🎯 Watch the market but don't move impulsively; stay calm and prepare for a buying opportunity if a correction occurs. If you are a trader, keep your orders ready and have clear stop-losses; monitor the news closely and work with strict capital management.
🧩 A pause is the most likely scenario, but the market wants a "cut soon, and crypto will be directly affected... especially major currencies, so prepare for volatility and think before you move. This is, of course, just analysis and opinion, not financial advice 😊👻.