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Fed Expected To Make Third Rate Cut Today—Here’s What We Should Expect
The Federal Reserve is set to announce its interest rate decision later today, with a high probability of a 25-basis-point rate cut. According to data from the Bureau of Labor Statistics (BLS), the US economy added 227,000 jobs in November, exceeding expectations and showing a rebound from months disrupted by hurricanes and strikes.
The robust job growth has contributed to a positive economic outlook, which could influence the Fed’s decision-making regarding interest rates. The BLS also reported that November’s Consumer Price Index (CPI) increased by 2.7% year-over-year, in line with expectations.
Despite recent progress in bringing down inflation from its peak of 9.1% in June 2022, the current rate is still above the Fed’s target of 2%. Jacob Channel, senior economist at LendingTree, expects a 25-basis-point cut at this meeting but notes that further cuts may not be necessary in the immediate future.
This scenario could lead to changes in economic policies under President-elect Donald Trump, which “might cause a resurgence in inflation or otherwise throw the economy off balance.” The Fed might then choose to hold off on further rate cuts to assess their effects on the economy.
The crypto markets are bracing for increased volatility ahead of today’s interest rate decision. Bitcoin (BTC) has dropped 2% over the past day, while Ethereum (ETH) has declined by 4%, according to CoinGecko data.
Source: cryptobriefing.com
