#FOMCMeeting Post: Adjusting Investment Strategies in Light of Fed Expectations

With the May FOMC meeting on the horizon, CME FedWatch data indicates only a 2.7% probability of a 25 basis point rate cut. The expectations for cuts are fading, pushing back to late 2025, suggesting a tighter monetary policy. This directly impacts risk assets, including cryptocurrencies, which tend to thrive in higher liquidity environments.

Investors should consider adjusting their portfolios. In cryptocurrencies, prioritizing assets with strong fundamentals, such as Bitcoin and Ethereum, can offer resilience against volatility. Reducing exposure to speculative altcoins, which are more sensitive to high rates, is prudent. In risk assets, diversifying into defensive sectors, such as established technology or utilities, can mitigate losses.

Macroeconomic uncertainty demands a conservative approach: increase liquidity, reduce leverage, and maintain a long-term investment horizon. With no imminent cuts, pressure on risk assets will persist. How are you adjusting your portfolio? Do you believe cryptocurrencies will withstand this environment?