What is FOMC?
The FOMC(Federal Open Market Committee) is a branch of the U.S. Federal Reserve that sets monetary policy, primarily through interest rates and open market operations. It meets eight times a year to decide on policies like the Federal funds rate, which influences borrowing costs and economic activity.
IMPACT ON THE CRYPTO MARKET:
INTEREST RATES:-
Higher rates (hawkish policy) increase borrowing costs reducing liquidity and risk appetite, often leading to crypto price drops. Lower rates (dovish policy) boost liquidity, supporting crypto price rallies.
MARKET SENTIMENT:-
FOMC announcement signals economic outlook. Positive signals (e.g., controlled inflation) can drive crypto optimism; uncertainty or tightening can trigger sell-offs.
DOLLAR STRENGTH:-
A tighter policy strengthens the U.S. dollar, pressuring crypto prices as many are priced in USD.
VOLATILITY:-
Crypto markets often see sharp price swings before and after FOMC meetings due to speculation and reactions to policy charges.
The precise effect depends on the FOMC's stance, economic context, and market expectations. For real-time impact follow me and stay tuned.
