- The market is pricing in an 81% probability of a Federal Reserve interest rate cut in September
- The next FOMC interest rate decision will be announced on September 17-18
- Analysts believe the crypto market is technically poised for a rally if the Fed delivers the cut
Crypto analysts believe the current market conditions suggest that the US Federal Reserve will cut interest rates by September. According to one analyst, the overall market trend reflects the 81% probability of a cut that is now widely priced in by traders.
The Fed will announce interest rate decisions on September 17-18
The Fed will provide its next update on the interest rate decisions in the US between September 17 and 18, after the next FOMC meeting. Interest rate is a crucial macroeconomic factor with several consequential effects. Some of the potential outcomes of reduced interest rates include easing borrowing and stimulating the economy. Interest rate cuts are also historically associated with boosting demand for assets such as cryptocurrency.
Despite overwhelming expectations, the Fed has so far resisted the pressure to cut rates. While top central banks in other countries have started cutting interest rates, and as Trump pressures Fed Chair Powell, his team maintained status quo at their last meeting, triggering a temporary decline across the market.
The White House wants the Fed to cut interest rates
According to reports, a bloated US debt is one of the main reasons the White House is leaning on the Federal Reserve to cut interest rates. Meanwhile, investors are paying close attention to whether the Fed will succumb to pressure and reduce interest rates, a development that many ot them consider potentially beneficial.
Crypto analysts believe the market is technically aligned to welcome an interest rate cut. Almost all top cryptocurrencies have retraced after a sustained rally, dropping into regions that investors consider ideal buy zones.
Many traders now have their limit orders in place, waiting for a trigger, like a Fed rate cut, to re-enter the market and open new bullish positions. This explains the growing bullish sentiment within the crypto ecosystem, despite the recent sideways price action.
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