Not only in Bitcoin, but also in all global markets, tonight’s FED interest rate decision and subsequent statements will be followed closely.
The biggest feature that distinguishes today from other interest rate decision days is that it will mark a turning point.
Today, it will be expected to give a signal from the FED that the interest rate hikes will stop after the 25 basis point rate hike. If the FED gives this signal, the interest rate hike period will be exited and the interest rates will be left high and fixed for a while. This scenario is expected to have a positive impact on risky assets and stock markets such as Bitcoin.
However, if there is no clear signal that the interest rate hikes will stop after the 25 basis point rate hike, this may increase the uneasiness of the market and cause a withdrawal in risky assets.
“The Change in the Text of the Decision Will Be Decisive”
Although economists are not very optimistic about the messages to be given by the FED, they do not expect a statement that will disturb the markets.
Speaking to Coindesk, Dick Lo, CEO of TDX Strategies, expressed the expectations as follows:
“After this rate hike, we expect the phrase “additional policy tightening may be appropriate” to be removed from the interest rate decision text and a more open-ended statement. The FED may leave the door open for further rate hikes, pointing out that it will depend on the data.”
“Tightening Message Hawk Can Be Interpreted”
Pepperstone Research Head Chris Weston stated that he was undecided about whether the Fed’s messages would make the market happy.
“After the risks in the banks, if the FED does not signal a rate cut for July or a lazy data-driven tightening, these statements can be seen as hawks and change the direction of risk.”
“Waiting for a Rally in Bitcoin”
Markus Thielen, on the other hand, stated that, contrary to the above analysts, even if the FED signals another rate hike, expectations that interest rate hikes will stop will remain alive.
“As the expectations that the FED will end the rate hike cycle are alive, it is unlikely that the dollar will recover here even if the FED signals another rate hike.
The risks in the banking sector, the pullback in inflation, the decrease in energy costs and the progress of unemployment rates in the direction desired by the FED give comfort at the end of the interest rate cycle. After a pigeon Fed, Bitcoin will likely rally.”
