FOMC Preview: How Will Bitcoin And Crypto React? All You Need To Know
11 Junho 2024 - 4:30AM
NEWSBTC
As the financial markets brace for the upcoming Federal Open Market
Committee (FOMC) meeting on Wednesday, June 12th, the Bitcoin and
crypto community is poised to assess the implications of any
Federal Reserve announcements on digital assets such as Bitcoin.
With the consensus forecast suggesting that the Federal Reserve
will hold the federal funds rate steady at 5.25%-5.50%, the primary
interest of investors has turned to the nuances of the Fed’s
forward guidance and economic projections. Crypto analyst Tomo
(@Market_Look) shared his insights on X, framing the upcoming FOMC
meeting as a non-event for those expecting drastic moves. He
stated, “Interest rates are likely to remain unchanged
(5.25%-5.50%). There will likely not be any major changes to the
statement or economic outlook, and the dot chart is expected to
shift in a hawkish direction.” Tomo also highlighted the
anticipated adjustments in the rate projections for the coming
years, noting, “In 2024, the rate will shift from 3 cuts to 2 cuts.
The hawkish surprise will be 1 cut.” He explained that the market
has already priced in these expected adjustments, suggesting
minimal surprise and limited market volatility in response. Related
Reading: Hedge Funds Heavily Betting For Bitcoin To Fall: Will This
Strategy Fail? “As of March, the distribution of dots for 2024 is 9
people in favor of keeping interest rates unchanged or cutting them
twice, and 10 people in favor of cutting interest rates three or
more times… a shift from three to two is already factored in.”
Banking giant ING’s team of economists, including James Knightley
and Padhraic Garvey, CFA, share a similar conservative outlook on
the Federal Reserve’s potential moves. They anticipate that the Fed
will underscore its cautious stance due to persistent inflation and
strong employment figures, potentially delaying rate cuts further
into the future. The ING team elaborated on their expectations,
“The US Fed accepts that monetary policy is restrictive, but
lingering inflation and strong jobs numbers mean it will indicate
it’s prepared to wait longer before seriously considering interest
rate cuts.” They anticipate that the dot plot, which will reveal
individual FOMC members’ rate predictions, will show a reduction in
the number of projected rate cuts for 2024 from three to possibly
one or two. According to Nick Timiraos of the Wall Street Journal,
JPMorgan and Citigroup have withdrawn their predictions for a rate
cut in July following the recent jobs report last Friday.
Currently, the majority of sell-side economists and other experts
monitoring the Federal Reserve anticipate one or two rate
reductions in either September or December of this year. JPM and
Citi scrapped their calls for a July rate cut after last Friday’s
jobs report. Most sell-side economists and other professional Fed
watchers now anticipate one or two rate cuts this year in either
September or December pic.twitter.com/x9tUD06Pmi — Nick Timiraos
(@NickTimiraos) June 10, 2024 Impact On Bitcoin And Crypto Bitcoin
and the broader crypto market have been quite sensitive to macro
economic data recently. The anticipation of a dovish
turn—particularly any hints of rate cuts—could weaken the dollar
and bolster Bitcoin and other digital assets as alternative
investments. Related Reading: Buy Or Sell Bitcoin Now? Analyst
Reveals Ultimate Bias Guide Conversely, a reaffirmation of the
current rate or a less dovish stance than expected could strengthen
the dollar and apply downward pressure on crypto markets. However,
the nuanced perspectives of FOMC members, as reflected in the dot
plot and the accompanying economic projections, could provide clues
about the medium-term trajectory of US monetary policy, which in
turn could affect investor sentiment in the crypto markets. A
hawkish tilt, suggesting fewer or delayed rate cuts, might
strengthen the US dollar and put downward pressure on Bitcoin and
other cryptocurrencies. Conversely, any dovish signals or
indications of a softer stance on rate increases in the near future
could buoy the crypto market. During the FOMC press conference,
Chair Jerome Powell’s remarks will be crucial for setting the tone
and expectations. Market participants will closely analyze his
comments for any shifts in tone regarding inflation, economic
growth, and future monetary policy adjustments. The interpretation
of these remarks could lead to significant price movements in the
Bitcoin and crypto markets. Moreover, the US Consumer Price Index
(CPI) data for May 2024 just hours before the FOMC meeting will be
critical. These data points will provide essential context for the
Fed’s decisions, influencing their assessment of whether the
current policy stance remains appropriate. At press time, BTC
traded at $67,707, down -3.5% since yesterday’s high at $71,200.
Featured image from Shutterstock, chart from TradingView.com
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