The Federal Reserve will announce its interest rate decision tonight (June 19, 2 AM Beijing time). According to CME's "FedWatch" data, the probability of a 25 basis point rate cut in June is 0.1%, while the probability of maintaining the current rate is 99.9%. Currently, the probability of the Federal Reserve maintaining the interest rate until July is 85.5%, and the cumulative probability of a 25 basis point rate cut is 14.5%.
From the news, the current market expects that the Federal Reserve will maintain the interest rate in June with a probability of over 99%, and this outcome is basically priced in. If the actual decision meets expectations, the short-term impact on the cryptocurrency market will be limited, as the market has already prepared for this; however, if an unexpected rate cut occurs (which is very unlikely), it may bring inflows of capital and boost sentiment in the cryptocurrency market, driving prices up, similar to the early stages of past rate cut cycles.
In the long term, the subsequent interest rate trends for July and beyond (such as the 14.5% probability of a rate cut in July) will be key. If the Federal Reserve starts a rate cut cycle, the cost of capital will decrease, and funds from traditional financial markets may flow into high-risk assets like cryptocurrencies, which would be beneficial for cryptocurrency prices; however, if economic data leads the Federal Reserve to maintain high interest rates for a longer period, the cryptocurrency market could continue to face pressure on capital, leading to a more cautious trend.
