Federal Reserve Rate Decision Poised to Impact Crypto Market Volatility
The U.S. Federal Reserve’s Federal Open Market Committee (FOMC) is set to release its rate review today, along with updated growth, inflation projections, and an interest rate forecast. According to CoinDesk, this announcement could trigger volatility in the cryptocurrency market, with major assets like Bitcoin (BTC), Ether (ETH), and Solana (SOL) potentially experiencing price swings of 3% to 5%.
At 12:30 UTC, Volmex's one-day implied volatility indices showed an annualized BTC volatility rate of 63.32%, suggesting a 24-hour price movement of about 3.31%. ETH and SOL volatility indices projected daily swings of 5.25% and 5.73%, respectively—levels that are standard in crypto but would be considered significant in traditional markets.
The Fed is expected to maintain its current benchmark borrowing rate while possibly signaling an end to its prolonged quantitative tightening program. However, potential concerns over stagflation in the economic outlook could temper gains in risk assets. As investors digest the Fed’s policy signals, the broader crypto market will be watching closely for any shifts in sentiment.
