Federal Reserve Rate Expectations Signal Near-Term Stability

CME FedWatch data indicates that financial markets are pricing in a 75.6% probability that the Federal Reserve will keep interest rates unchanged in January.

This suggests that the narrative of "higher for longer" remains intact for the immediate future, reducing the likelihood of a near-term dovish pivot that could fuel risk assets like cryptocurrencies.

However, looking ahead to March, the market sees a growing possibility of a rate cut. This creates a "wait-and-see" environment where crypto asset valuations will be highly sensitive to incoming inflation and employment data that could shift these future probabilities.

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