As expected by the market, Fed policymakers kept the benchmark federal funds rate in the range of 5.25%-5.50%. With the end of the June FOMC meeting, traders are now focusing on the first rate cut of the year in September.
Due to concerns about the scenario of a US recession, the market has increased bets on the Fed to cut interest rates. The yield on the US 2-year Treasury bond continued its overnight decline and fell to 4.11% in early Asian trading, the lowest level since May 2023.
As of press time, interest rate futures show that the market is pricing in an 87BP rate cut by the Fed this year, and there are still 13BPs to bet on 4 rate cuts this year. The Fed still has 3 meeting windows to cut interest rates this year, and the probability of the Fed cutting interest rates by 50BP in September has risen to 33%.
The possibility of a rate cut depends on strong economic growth data.
The result of a rate cut may increase market liquidity, which in turn is beneficial to cryptocurrencies.
