The Federal Reserve's upcoming meeting is poised to maintain the current policy interest rate, aligning with market expectations. The CME Group survey indicates no projected interest rate cuts in the near term, with the earliest potential cut anticipated for September. This expectation sets the stage for potential implications on the cryptocurrency market, historically influenced by interest rate decisions.
Historical Trends and Market Response
Interest rate decisions have historically played a significant role in shaping Bitcoin and altcoin prices. Maintaining or lowering interest rates can trigger inflation concerns, prompting investors to seek alternative stores of value like Bitcoin. Conversely, rate hikes may briefly temper enthusiasm for risk assets, including cryptocurrencies.
2023 Anticipation and Economic Realities
In 2023, anticipated interest rate cuts for 2024 were delayed in the U.S. due to economic data not meeting expectations. This delay impacted the projected movement in altcoins, highlighting the sensitivity of the cryptocurrency market to macroeconomic factors.
Potential Scenarios and Market Outlook
If Federal Reserve Chairman Powell hints at further delays in interest rate cuts, signalling rates will remain unchanged for an extended period, a deeper downturn in the cryptocurrency market could ensue. Conversely, a more proactive stance from Powell, suggesting a potential aggressive rate cut later in the year, could inject optimism into the cryptocurrency market.
In conclusion, the upcoming Federal Reserve meeting and its impact on interest rates have the potential to sway the cryptocurrency market. Investors and enthusiasts alike will be closely monitoring Powell's statements for clues on the future direction of interest rates and its implications on digital assets.
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🇺🇸 Jerome Powell (head of #FED)

✔ Inflation has dropped significantly, progress in the economy.
✔ The further path is uncertain.
✔ Risks become more balanced.
✔ US GDP is supported by high consumption. demand and the “improvement” of supply chains.
✔ The Fed expects further improvement in the labor market.
✔ Inflation forecasts remain unchanged.
✔ Salary growth is weakening.
❗️ Perhaps at some point we will reduce the rate this year, but the prospects are uncertain.
✔ The rate has probably reached its peak.
✔ Unexpected weakness in the labor market - we will respond immediately!
✔ We are ready to keep the rate high if required!
❗️ We discussed with the chairs the SLOWdown of the Fed's balance sheet contraction (QT)
✔ Our forecasts do not mean that we have accepted the current level of inflation.
✔ Demand for goods, I believe, will continue to strive for balance with supply.
✔ Bilateral risks in the US economy - current realities.
❗️ Inflationary spikes in January and February are seasonal adjustments. Nothing terrible!
✔ If the labor market weakened significantly, we would promptly reduce the rate.
✔ A significant weakening of the labor market is a reason for the Fed to lower the rate.
❗️My intuition tells me that the Fed rate will not drop to the levels we have seen in past years.
✔ We need to see more data - we need confidence in a further decline in inflation.
✔ No one knows whether rates will be even higher in the long term.
✔ There remains a HIGH level of uncertainty around all of this.
✔ Most believe that the Fed will cut rates this year, but EVERYTHING will depend on the data.
✔ STRONG job growth is NOT a reason to worry about inflation.
✔ It is NORMAL if there is more stable inflation in the US in the 1st half of the year.
✔ Financial conditions (current), of course, put pressure on the country's economy.
✔ If there is a lot of demand, but the supply does not lag behind, inflation will not rise.
✔ We need more time to evaluate winter inflation data.
❗️NO MORE crazy imbalance in the labor market!
❗️We expect the unemployment rate to RISE!
❗️There are no deadlines for reducing the rate of balance contraction (QT) ... SOON. That's all I can say.
✔ We want to avoid turbulence. This is the main reason for the slowdown in the balance sheet contraction (QT) rate.
✔ We closely monitor liquidity - we monitor money markets in order to stop reducing the balance sheet (selling Fed assets) IN TIME .
✔ We think it could further reduce the Fed's balance sheet.
✔ It is important to monitor inflation data.
✔ We remember 2019. We take into account all the data in order to avoid major liquidity problems.
✔ Questions about CBDC have become very relevant in recent years, but the Fed does not have a secret laboratory to create such a currency.
❗️We are still very far from creating a CBDC. There is no active work in this direction.
✔ The Fed is not ready to propose anything to the US Congress on the creation of a CBDC.
❗️The Fed is closely monitoring “stress indicators” in the country’s banking segment.
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