All eyes are now on the upcoming FOMC meeting scheduled for May 7th. While investors had been hoping for a rate cut, CME FedWatch data currently shows only a 2.7% probability of a 25bps reduction in interest rates.
This means that the Federal Reserve is likely to keep rates steady, or at the very least, delay any easing in monetary policy. With inflation remaining sticky and labor markets resilient, the Fed appears unwilling to loosen too soon.
Why does this matter for crypto?
Because crypto, like equities, thrives on liquidity. High interest rates mean more capital staying in safe assets like USD and bonds. Lower rates invite risk-on behavior, sending funds into assets like BTC, ETH, and altcoins.
In short:
• No cut = market likely stays cautious.
• Surprise cut = potential bullish breakout.
• Hawkish tone = possible short-term volatility or correction.
Key takeaway: Be ready. FOMC Day isn’t just another Tuesday—it’s a major catalyst that could shake up both traditional and crypto markets.
This is not financial advice. Please do your own research and manage risk accordingly.