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FED Rate Cut Expectations: 96% Chance of a 25 Basis Points Cut Today
As the US Federal Reserve (Fed) concludes its final meeting for the year, market expectations suggest that there is an overwhelming 96% chance of a 25 basis points rate cut today. The anticipation surrounding this decision stems from the recent surge in inflationary pressures and signs of economic downturn.
The Fed’s actions are crucial in shaping the trajectory of cryptocurrency markets. The interest rate cuts would likely lead to increased liquidity, potentially driving up asset values in the coming days.
Inflation Metrics on the Rise
One of the key factors fueling these expectations is the sudden spike in US inflation metrics. The Consumer Price Index (CPI), a benchmark for tracking inflation, has begun to rise once more. As of November 2024, the CPI stood at 315.66 points, marking an increase from earlier this year. This upward trend may prompt the Fed to adjust monetary policy and curb inflationary pressures.
Labor Market Challenges
A further catalyst for potential rate cuts is the weakening labor market situation. The US Initial Jobless Claims index has shown a concerning uptrend in recent weeks, culminating in a reading of 242K by mid-December. This signals a slowdown in employment growth, which could necessitate Fed intervention to boost economic activity.
As we move into 2025, it is crucial for policymakers and investors alike to understand the implications of these decisions on the global financial landscape. With the US presidential transition underway, future monetary policy will be closely tied to the new administration’s agenda.
Source: coinpedia.org
