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The Federal Reserve is set to announce its latest interest rate decision today, and the market is bracing for potential volatility in response. With a significant 98% chance of a 25-basis-point cut, investors are holding their breath as they await the outcome.
According to recent data from the Bureau of Labor Statistics (BLS), the US economy added an impressive 227,000 jobs in November, surpassing expectations and indicating a rebound from previously disrupted months. This job growth has led to a positive outlook for the economy, which could significantly impact the Fed’s decision regarding interest rates.
The current inflation rate remains above the Federal Reserve’s desired target of 2%, standing at 2.7% year-over-year in November’s report. In response, the central bank is likely to proceed with the previously anticipated 25-basis-point cut. However, Jacob Channel, senior economist at LendingTree, suggests that there may not be further cuts in the near future.
Channel noted potential changes in economic policies under President-elect Donald Trump, which could lead to a resurgence in inflation or disrupt the economy’s balance. In this scenario, the Fed might decide to hold off on additional rate reductions to assess their effects before making any further decisions.
As the interest rate decision draws near, crypto markets are experiencing increased volatility. Bitcoin (BTC) has dropped by 2% over the past day, while Ethereum (ETH) has seen a decline of 4%, as per CoinGecko data. The overall cryptocurrency market capitalization currently stands at $3.8 trillion, reflecting a 4% decrease over the past 24 hours.
Bitcoin briefly dipped to $104,000 before recovering back up to $107,000 on Tuesday. The slight pullback triggered a broader decline in altcoins, including Ripple (XRP), Solana (SOL), Doge (DOGE), and Binance Coin (BNB).
Source: cryptobriefing.com
