This week holds significant implications for the US financial landscape, as the Federal Reserve is poised to announce a pivotal interest rate change. Expected on December 18, the decision to implement a 25 basis points (bps) rate cut could reverberate across various sectors, including the burgeoning crypto market. This marks the second rate adjustment of 2024, following a prior cut earlier in the year. Here’s an in-depth look at the potential impacts and what investors should be aware of.
Federal Reserve’s Interest Rate Decision: What You Should Know
In September, the Federal Reserve initiated the first rate cut of 2024, adjusting the interest rate target to a range between 4.75% and 5%. This decision was largely influenced by a noticeable downturn in the job market. Notably, the Initial Jobless Claims index showcased a decline from 260,000 to 242,000 during the first week of October. Now, as December 18 approaches, the Federal Reserve is anticipated to announce another substantial interest rate cut of 25bps. According to CME, there is a substantial 93.4% probability of this rate adjustment occurring.
Impact of Fed Rate Cut on Cryptos
Since the Federal Reserve’s rate reduction in September, the crypto market has experienced remarkable growth, with an overall increase of 71.77%. Excluding the top ten cryptocurrencies, the market capitalization has surged by at least 87.16%. During October and November, Bitcoin exhibited growth rates of +11.2% and +37.4%, respectively. Although Ethereum showed a decline of -3.16% in October, it rebounded with a robust 47.4% growth in November. Industry experts are optimistic that the upcoming rate cut will continue to drive positive momentum in the crypto market. In the past 24 hours alone, Bitcoin and Ethereum have appreciated by 2.3% and 1.9%, respectively.
Prime Economic Events Crypto Investors Should Never Miss
Looking ahead, several key economic indicators are scheduled for release on Thursday, December 19. Notably, the US GDP Growth Rate Final and the US Core PCE Prices Final will be unveiled. In the first quarter, the GDP growth rate was recorded at a modest 1.6%, which later increased to 3% in the second quarter. Current consensus suggests a slight decrease to approximately 2.8%. Similarly, the PCE Prices index, which was at 3.7% in the first quarter and dropped to 2.8% in the second quarter, is expected to further decline to 2.1%, according to TEForcast predictions.
In conclusion, this week is poised to be a turning point for both the US economy and the crypto market. The Federal Reserve’s interest rate decision, combined with the release of crucial economic indicators such as GDP and PCE Prices, will play a significant role in shaping market trajectories. Investors and market participants should remain vigilant to adapt to these evolving economic conditions.
