The US Federal Reserve (FED) announced its interest rate decision, which was eagerly awaited by the cryptocurrency markets. The bank kept its policy interest rate stable in the range of 3.75–4.00 percent.
Following its 25 basis point increase at its September meeting, the Fed did not change interest rates at this meeting. Thus, the policy interest rate remained at its current level.
The decision aligned with the market’s prevailing expectations. Prior to the meeting, CME FedWatch data showed a 92.8% probability of interest rates remaining unchanged and a 7.2% probability of a 25 basis point increase.
All eyes are on Warsh at 9:30 PM!
Following the interest rate decision, investors are now focused on the press conference, which will begin at 9:30 PM Turkish time. Statements by FED Chairman Kevin Warsh regarding inflation, economic growth, and future meetings will be closely watched.
In particular, how Warsh approaches a new interest rate hike in December is important for pricing in Bitcoin and altcoins.
Prior to the decision, CME FedWatch data indicated that the probability of interest rates remaining above their current level after the December 9 meeting was priced at a total of 87.6 percent. Therefore, the decision not to change interest rates tonight raises the question of how investors will update their expectations for tightening at the end of the year.
The meeting was not scheduled to release new economic forecasts or a dot plot showing members’ interest rate expectations. Therefore, the messages Warsh delivers at the press conference will be one of the main indicators of the Fed’s next steps.
The Critical Process Continues for Bitcoin and Altcoins
Prior to the decision, Bitcoin was trading at around $80,500. Ethereum was at $2,333, Solana at $101, and XRP around $1.31.
In a market where interest rates are strongly expected to remain unchanged, Warsh’s messages regarding further increases could influence the continuation of price movements. While indicating the need for further tightening in the fight against inflation could increase selling pressure, his message about observing the effects of the current interest rate level could support risk appetite.
The markets’ agenda won’t end with the press conference. Tomorrow at 3:30 PM Turkish time, the US will release its preliminary third-quarter growth data and the September personal income and spending report, which includes PCE inflation indicators. These figures could reignite expectations for the year’s final Fed meeting.
This is not investment advice.
