- The FOMC will meet between September 17 and 18.
- The Fed will probably cut interest rates during September’s FOMC meeting.
- CME FedWatch projects a 69% chance for the Fed to cut rates by 25%.
The U.S. Federal Open Market Committee (FOMC) is set to meet on September 17-18, and analysts are anticipating an interest rate cut. The CME FedWatch tool currently predicts a 31% chance of a 50% rate cut and a 69% chance of a 25% cut.
Specifically, the CME FedWatch calculated the possibility of a 25% interest rate cut at the upcoming FOMC meeting to be 69%.
Given global market conditions and their impact on the U.S. economy, most analysts believe a rate cut is likely in an effort to stave off a potential recession. Lower interest rates make borrowing cheaper, which can stimulate consumer spending and business investment.
Read also: Inflation, Interest Rates, and Bitcoin: What Traders Are Watching
It is worth noting that while reducing interest rates would spur the economy and potentially increase consumer’s spending powers, it could negatively impact the economy by increasing inflation. Usually, consumers spend more when interest rates decline, leading to increasing demand that would increase the price of goods and services.
Read also: Bitcoin Market Sees Sell-Off Before FOMC Meeting
Fed Chair Jerome Powell recently acknowledged a “cooldown in the labor market” and hinted that a rate cut is coming. The timing and extent of the cut, however, will depend on incoming data, the evolving outlook, and the balance of risks.
Notably, past interest rate decisions affected crypto prices and investors in the cryptocurrency sector are looking out for the upcoming FOMC decision. Typically, low interest rates increase investors’ appetite for assets with higher risks and higher returns. Hence, analysts believe significantly lowering the rates could spur an influx of funds into the crypto market.
Meanwhile, it is crucial to observe closely, as other factors, including the upcoming U.S. elections, could influence users’ decisions in high-risk markets.
Disclaimer: The information presented in this article is for informational and educational purposes only. The article does not constitute financial advice or advice of any kind. Coin Edition is not responsible for any losses incurred as a result of the utilization of content, products, or services mentioned. Readers are advised to exercise caution before taking any action related to the company.
