The probability of the Federal Reserve (Fed) cutting interest rates in September and October 2024 is assessed to be very high.
According to CME's Fed Watch tool on August 11, 2024, the probability of the Fed keeping interest rates unchanged in September is only 9.3%, while the probability of a 25 basis point cut reaches 90.7%. In October, the likelihood of maintaining rates drops to 4.5%, while the probability of cutting interest rates by a total of 50 basis points is 46.5%.
MAIN CONTENT
The probability that the Fed will cut interest rates by 25 basis points in September is 90.7%.
The probability of keeping interest rates unchanged in September is only 9.3%.
In October, the probability of a total cut of 50 basis points is 46.5%.
What is the likelihood that the Fed will keep interest rates unchanged or lower them in September 2024?
Data from CME's Fed Watch tool as of August 11, 2024, shows that the Fed has a 9.3% probability of keeping interest rates unchanged in September, while the likelihood of a 25 basis point cut is very high, reaching 90.7%.
This figure reflects market expectations that the Fed will shift its monetary policy to support economic growth and reduce inflationary pressures after previous hikes. This is an important indicator that helps investors orient their financial strategies and assess cryptocurrency trends.
What is the probability that the Fed could reduce interest rates by a total of 50 basis points in October 2024?
Analysis from CME indicates that the probability of the Fed cutting interest rates by a total of 50 basis points in October stands at 46.5%. Meanwhile, the likelihood of the Fed only cutting by 25 basis points accumulatively is 48.9%, while the chance of keeping rates unchanged is 4.5%.
This indicates that market sentiment remains quite optimistic regarding the Fed's potential interest rate cuts in Q4 2024, aimed at stimulating economic development as well as stabilizing the global financial market.
The Fed's interest rate policy directly affects capital flows and fluctuations in the global cryptocurrency market.
Financial expert Nguyen Minh Tuan, 2024
Why is forecasting the Fed's interest rate policy important for the cryptocurrency market?
The Fed's interest rate decisions are a key factor influencing liquidity and capital costs globally, directly affecting asset markets and cryptocurrencies.
When the Fed lowers interest rates, borrowing costs decrease, driving capital into risk assets such as cryptocurrencies and stocks. Therefore, monitoring interest rate forecasts helps investors predict market fluctuations and adjust their portfolios accordingly.
How is Fed Watch data constructed to provide probability about interest rate policy?
CME's Fed Watch is based on federal interest rate futures prices, reflecting market expectations regarding the Fed's monetary policy in upcoming sessions.
This tool is continuously updated, allowing tracking of investor sentiment and movements, thereby providing accurate probabilities regarding the likelihood of maintaining or adjusting the Fed's interest rates.
What are the potential impacts when the Fed cuts interest rates on the global economy and cryptocurrencies?
Lowering interest rates often stimulates investment and consumption, promoting faster economic growth. However, it can also exert inflationary pressures and risk currency devaluation.
For the cryptocurrency market, a low interest rate policy often increases the attractiveness of risk assets, allowing Bitcoin, Ethereum, and Altcoins to appreciate and improve liquidity.
Frequently Asked Questions
1. What is Fed Watch and why is it important?
Fed Watch is a tool that forecasts the probability of the Fed's interest rate decisions based on futures contract prices, helping investors grasp the trends in monetary policy.
2. What is the probability that the Fed will reduce interest rates by 25 basis points in September 2024?
The probability reaches 90.7%, indicating very high market expectations for the Fed to cut interest rates this month.
3. How will a Fed interest rate cut affect cryptocurrencies?
Lowering interest rates often increases capital flows into risk assets, providing an opportunity for cryptocurrencies to appreciate and improving liquidity.
4. How many basis points is the Fed likely to cut in October 2024?
The probability of a total cut of 50 basis points is 46.5%, nearly equal to the probability of a 25 basis point cut at 48.9%.
5. Why does the market forecast a low likelihood of maintaining interest rates?
Due to reduced inflationary pressures and the need for economic stimulus, the market expects the Fed to lower interest rates rather than maintain them.
Source: https://tintucbitcoin.com/fed-co-907-kha-nang-giam-lai/
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