#FOMCMeeting

Hi, there! 🖐😎

Everybody has some concerns about Federal Open Market Committee (FOMC) meeting: some have hope that its decisions and outcomes will bring benefits for traders and dealers, some fear about negative consequences of those decisions and outcomes...

With the FED's May 2025 FOMC meeting approaching, data of "Fedwatch" by Chicago Merchantile Exchange (CME) shows only a 2.7% probability of a 25 bps rate cut in May: the rate cut expectations continue to be pushed back.

A "bps rate cut" refers to a reduction in an interest rate expressed in basis points. One basis point (bps) is equal to 0.01%, or 1/100th of 1%. Therefore, a "bps rate cut" means a decrease in the interest rate by a certain percentage point, where each percentage point is divided into 100 basis points. 

For example: a 50 bps rate cut means the interest rate has been lowered by 0.50% (50 * 0.01%); a 25 bps rate cut means the interest rate has been lowered by 0.25%, etc.

Why does business use basis points? Using basis points allows for precise communication of small interest rate changes that might be difficult to express clearly using percentages alone. For instance, a change from 5.25% to 5.30% is easily understood as a 5 bps increase.

So basis point is 1/100th of 1% and is commonly used to indicate interest rates or changes in rates in bonds and other financial instruments.

Another question is: how should investors adjust their crypto and risk asset allocations? The answer can be as easy: DYOR, plan carefully and trade in smart way, as well as very long and boring: take into account this, that..., calculate this, that...and other blah-blah-blah...

Have a good trade and make a lot of profit.

Bye! 😎👍