Today is the long-awaited Fed meeting day. In July, the Fed also left interest rates unchanged at 3.5-3.75%. Following the July decision, markets are now focused on the September interest rate decision.
When Will the FED’s September Interest Rate Decision Be Announced?
The Federal Reserve’s September interest rate decision is expected to impact gold, the dollar, oil, Bitcoin, and cryptocurrencies. The Fed will announce its September decision on Wednesday, September 16th at 9:00 PM Turkish time (21:00). Following the decision, Fed Chairman Kevin Warsh will make a statement at 9:30 PM.
In Which Direction Are Expectations Focusing?
Markets now see a 93% probability that the Fed will announce its first interest rate hike since July 2023 today.
The Kobeissi Letter’s post, citing data going back to 2008, stated that the Fed has always done so when market expectations for interest rate hikes were this high. According to analysts, if the Fed decides to leave interest rates unchanged today, it would be the biggest dovish surprise at a scheduled policy meeting since 1994.
However, analysts, noting that we are currently going through a particularly unusual period, pointed out that FED Chairman Kevin Warsh was appointed by President Trump with the expectation that he would cut interest rates.
In addition, numerous major US institutions, including Goldman Sachs, JPMorgan, and Morgan Stanley, expect the Fed to raise interest rates by 25 basis points at its September 16 meeting. Their predictions suggest that a high interest rate environment may need to be maintained for some time to allow inflation to permanently fall to the 2% target.
What Are Bitcoin Investors Doing Before the FED Decision?
Experts say that ahead of the Fed’s interest rate decision, investors are reducing their risk appetite in the cryptocurrency market and turning to stablecoins.
According to Talos data reported by CoinDesk, stablecoins saw a net buying trend of 28 percent, while buying appetite for Bitcoin and Ethereum declined. However, experts say the real question in the market is not just the interest rate decision itself, but which assets the pent-up capital will flow into after the decision.
A noteworthy development in stablecoins!
Talos data shows a net buying trend of 28% in stablecoins ahead of the FED meeting. Prior to previous FOMC meetings, there was an average net selling trend of 8% in stablecoins.
While the buying trend in stablecoins increased to 28%, the net buying trend for Bitcoin decreased from 10% to 3%, and for Ethereum from 23% to 9% during the same period. The data suggests that investors prefer to wait in more liquid and relatively low-risk assets before making a decision.
Bitcoin investors are cautiously awaiting the Fed’s decision, with both investors and the market focused not only on the interest rate decision but also on messages from Fed Chairman Kevin Warsh regarding future interest rate policy.
*This is not investment advice.
