As the Federal Reserve meeting approaches, markets are closely examining the anticipated rate cuts and their potential impact on asset prices over the coming months.

Rate Cut Predictions

Out of 114 economists polled, 104 experts predict the Federal Reserve will cut funding rates by 25 basis points, marking the first cut in four years. Meanwhile, nine analysts forecast a 50 basis points (bps) cut.

Market Expectations

According to QCP Capital, citing Fed Fund Futures pricing, market participants see a 66% chance of a 50 bps decision at the Federal Open Market Committee scheduled for Wednesday, Sept. 18. The likelihood of a 25 bps cut stands at 33%.

Similar data from CME FedWatch indicated a 61% probability as of Sept. 16. Just a week ago, trader expectations calculated a 14% possibility of a 50 bps cut.

Potential Impacts

QCP Capital analysts noted that the impact of interest rate cuts remains uncertain. In a note to investors, QCP mentioned that the exact monetary policy decision, Dot plot projections, and Fed chair Jerome Powell’s post-FOMC remarks could significantly influence price movements.

We are confident that volatility will be high in the days following the meeting, as traders readjust their positions over the next few weeks. The regime change could also signal the start of strong macro trends.

Cryptocurrency Market Reaction

Hours before the FOMC meeting, the total cryptocurrency market was down around 4%. Bitcoin and Ethereum fell by over 2% each in the last 24 hours. Major altcoins like Solana, Ripple, Dogecoin, and Toncoin also experienced declines.

Proponents suggest that additional liquidity could accelerate price ascension in a low-rate economy. As we head into the fourth quarter, many market participants believe historical patterns will play out, leading to price surges.

Insights from Industry Leaders

JPMorgan CEO Jamie Dimon commented on the FOMC meeting and the Fed’s potential pivot, describing the monetary shift as a “minor thing.” Dimon emphasized that larger global events, such as geopolitical tensions in Europe and the Middle East, are likely more significant factors to consider.

Fed rate cuts won’t be “earth-shattering.” These changes are minor compared to broader economic issues.

Stay informed and keep an eye on market movements as the Federal Reserve’s decisions unfold. For more updates on cryptocurrency and financial news, explore the latest articles on Global Crypto News.

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