#FedDecision looms after US gov moves Bitcoin – here’s what to expect
Federal Reserve Interest Rate Decision and Implications for Crypto
The US Federal Reserve will announce its interest rate decision on Wednesday at 2 PM EDT. While a rate cut is not expected, the CME FedWatch tool indicates a 4.1% chance of a rate cut by September, with a 12% to 13.8% chance of a 50 basis point reduction.
Crypto Market Context:
- The US consumer price index (CPI) showed moderate inflation at 3.3% year-on-year in June, boosting the crypto market.
- #Polymarket odds for no rate change in July are at 96%.
Potential Outcomes:
- Rate Hike: Indicates steady economic improvement, which could positively impact crypto.
- Rate Cut: Bullish for crypto as lower rates reduce borrowing costs and encourage investment, weakening fiat currencies and driving interest in alternative assets like crypto.
#bitcoin☀️ is currently trading at around $66,400, experiencing volatility but with a favorable outlook if rate cuts occur in September.
Divergent Central Bank Decisions:
1. Bank of Japan (BOJ): Analysts are divided on whether the BOJ will raise rates from 0%-0.1% or signal an imminent hike.
2. Federal Reserve: Expected to hold rates steady, with markets anticipating a clear signal of a rate cut in September.
3. Bank of England (BOE): Split on whether the BOE will cut rates for the first time in years.
These decisions reflect a broader trend of monetary easing among major economies, potentially benefiting risk assets like Bitcoin in the long term.
Government Actions and Bitcoin:
- The DOJ recently moved $2 billion of seized Bitcoin, coinciding with the Fed’s upcoming decision, raising questions of coordination. A dovish Fed could mitigate any negative impact on Bitcoin from the sale, while a hawkish stance could increase market uncertainties.
Summary:
- The Fed, BOJ, BOE actions, and DOJ's Bitcoin movement create a complex backdrop. Easier global monetary policy could benefit Bitcoin long-term.
Source - cryptobriefing.com
