This week is shaping up to be critically important for the US financial landscape. The US Federal Reserve is poised to unveil a significant monetary policy change with a projected 25 basis points (bps) rate cut on December 18. This decision is anticipated to reverberate across various sectors, notably impacting the crypto market. As the second rate cut of 2024 approaches, here’s a comprehensive look at what lies ahead.
Federal Reserve’s Interest Rate Decision: What You Should Know
Back in September, the Federal Reserve initiated its first rate cut of 2024, adjusting the interest rate target to a range of 4.75% to 5%. This move was largely driven by a weakening job market. During the second week of October, the Initial Jobless Claims index experienced a decline, moving from 260,000 down to 242,000. Now, on December 18, the Federal Reserve is expected to announce its second significant rate cut of 25bps. According to CME, there’s a 93.4% probability of this rate cut occurring, reflecting the market’s anticipation and confidence in this outcome.
Impact of Fed Rate Cut on Cryptos
Since the Federal Reserve’s rate cut in September, the crypto market has experienced a substantial upswing, with a growth rate of 71.77%. Notably, the market capitalization of cryptocurrencies, excluding the top ten, has surged by an impressive 87.16%. October and November marked significant periods for Bitcoin, with growth rates of 11.2% and 37.4%, respectively. Although Ethereum faced a slight setback in October with a negative performance of -3.16%, it rebounded with a remarkable 47.4% growth in November. Experts predict that the anticipated rate cut will continue to bolster the crypto market. Over the last 24 hours, a positive trend has been observed, with Bitcoin and Ethereum appreciating by 2.3% and 1.9%, respectively.
Prime Economic Events Crypto Investors Should Never Miss
As the week progresses, several key economic events are on the horizon that could significantly influence market dynamics. On Thursday, December 19, the release of the US GDP Growth Rate Final and the US Core PCE Prices Final will be closely monitored. Initially, the GDP growth rate stood at 1.6% in the first quarter but rose to 3% in the second quarter. Current consensus forecasts suggest a slight decline to 2.8% this time around. Similarly, the PCE Prices index, which was at 3.7% in the first quarter and dipped to 2.8% in the second quarter, is expected to drop further to 2.1%, aligning with TEForcast predictions.
In conclusion, this week is pivotal for both the US economy and the crypto market. With the Federal Reserve’s impending rate decision and the release of crucial economic indicators such as GDP and PCE Prices, these developments are poised to shape market trajectories, potentially leading to significant financial shifts.
