#FOMCMeeting : Rate Cut Hopes Fade — What’s Next for Crypto & Risk Assets?
With the Fed’s May FOMC meeting approaching, market sentiment is shifting. The CME FedWatch Tool now shows only a 2.7% probability of a 25 basis point rate cut in May — a major drop from expectations earlier this year. Sticky inflation and a resilient job market have delayed hopes of near-term easing.
This shift has key implications for crypto and risk assets.
Higher-for-longer interest rates usually weigh on speculative assets. With tighter liquidity and no yield from assets like Bitcoin and altcoins, the short-term upside may remain limited. We could see more sideways or corrective action in crypto markets until the macro picture improves.
However, since rate hikes appear to be paused, some downside risks are also reduced. For long-term investors, this could represent a healthy consolidation phase rather than a bearish reversal.
How should investors adjust?
Focus on high-quality assets like BTC and ETH
Be cautious with leverage — volatility may spike post-FOMC
Watch inflation and job data closely to anticipate Fed moves
In short, the Fed’s cautious stance calls for balanced strategies. Reading macro signals and managing exposure wisely will be key for navigating this phase in crypto markets.
