The Fed’s Interest Rate Decision: Market Impact & Expectations

In the next 18 hours, the Federal Reserve will announce its decision on interest rates—an event that could significantly impact the financial markets.

Currently, there is a 90% probability that the Fed will keep rates unchanged, which could trigger a sharp market downturn. However, if a rate cut is announced, markets could see a strong recovery to the upside.

What to Expect from the Fed

The federal funds rate is expected to remain in the 4.25%-4.5% range.

Since September 2024, the Fed has already cut rates three times.

The latest dot plot suggests only two more 0.25% rate cuts by the end of 2025.

With inflation still above the Fed's 2% target, policymakers may opt to hold rates steady to assess the effects of previous reductions.

Market Implications

Wall Street expects no change in rates, shifting the focus to the Fed’s monetary policy statement and Chair Jerome Powell’s press conference.

Any signals regarding future rate cuts or shifts in the Fed’s outlook could influence market sentiment and the US dollar's value.

A bearish move in Bitcoin (#BTC) and Ethereum (#ETH) is possible if rates remain unchanged. Meanwhile, MicroStrategy’s ongoing BTC acquisitions add another layer of intrigue to the crypto market.

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