#XRPETF 🟡 Bitcoin Fluctuates Ahead of Fed’s Interest Rate Decision

Bitcoin (BTC) slid to as low as $59,500 on Binance as markets brace for tomorrow’s Federal Open Market Committee (FOMC) meeting. Investors are anticipating a hawkish tone from the Federal Reserve (Fed), with most expecting no change to current interest rates.

According to the CME FedWatch Tool, just 4.4% of economists foresee a rate cut—the first in over a decade—while a commanding 95.6% expect rates to remain steady at 5.25%-5.50%.

The Kobeissi Letter notes that market data now shows a 36% chance that there will be no interest rate cuts in 2024—a sharp shift from four months ago when that probability was only 3%.

Expectations have also scaled back from six rate cuts to just one, with the probability of two or more cuts dropping to 31%.

🔺 Stagflation Concerns Mount

Meanwhile, the US economy faces growing stagflation risks as inflation remains persistent and growth slows.

GDP growth for Q1 2024 cooled to 1.6%, missing the 2.2% forecast and down from 3.4% in the prior quarter. At the same time, the Core PCE inflation index rose sharply from 2.0% to 3.7%.

Fed Chair Jerome Powell commented that recent data has not strengthened the Fed’s confidence, suggesting a longer road to achieving economic stability. He emphasized that current monetary policies remain appropriate for navigating current risks, signaling a prolonged period of elevated interest rates without further hikes.

Bitcoin’s price reflected these macroeconomic pressures, slipping below $62,000 earlier in the week amid rising stagflation fears.

Although BTC briefly surged above $64,000 following the launch of spot Bitcoin and Ethereum ETFs in Hong Kong yesterday, the rally faded quickly as investors turned cautious ahead of the Fed’s critical announcement.

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