This is an extremely crucial week for the US market. The US Federal Reserve is expected to announce a 25 basis point interest rate cut on December 18. The event is expected to have an impact on the crypto market. The upcoming one is the second rate cut in 2024. Here’s what you need to know.
The Federal Reserve’s interest rate decision: What you need to know
It was in September that the Federal Reserve made its first interest rate cut of 2024. It subsequently lowered the interest rate target to a range of 4.75% to 5%. It was mainly the weakened labor market that prompted the Fed to take a rapid interest rate cut. In the sector week of October, the Initial Workless Claims index fell from 260 thousand to 242 thousand.
On December 18, the US Federal Reserve is likely to announce its second major rate cut of 25 basis points.
CME gives a probability of at least 93.4% for a rate cut of 25 basis points.
Impact of the Fed Rate Cut on Cryptos
Since September’s federal interest rate cut, the entire crypto market has seen a growth of 71.77%; in particular, the market capitalization of all cryptos, excluding the top ten, has increased by at least 87.16%.
In October and November, the Bitcoin market showed growth of +11.2% and +37.4% respectively. Although the Ethereum market recorded a negative performance of -3.16% in October, the market recorded a positive performance of 47.4% in November.
Experts believe that the upcoming interest rate cut will also have a positive impact on the crypto market. Over the past 24 hours, the entire market has witnessed a positive change. Bitcoin and Ethereum grew by 2.3% and 1.9% respectively during the period.
Important economic events that crypto investors should never miss
The US GDP growth figures and the US Core PCE awards final will be released on Thursday, December 19. In the first quarter, GDP growth was only 1.6%. In the second quarter this grew to 3%. This time the consensus is that the index will fall further to 2.8%. The TEForcast also supports consensus.
In the first quarter of 2024, the PCE price index was 3.7%. In the second quarter it fell to 2.8%. This time the consensus is that the index will fall to 2.1%. The TEForcast also predicts the same.
In conclusion, this week is crucial for both the US economy and the crypto market. With the Federal Reserve’s interest rate decision and key economic indicators such as GDP and PCE prices ready for release, these events could shape the market’s trajectory.