Fed plays it cool: Inflation down, rate cuts on the horizon

Cryptopolitan
Updated
Mitrade
coverImg
Source: DepositPhotos

The Federal Reserve’s November minutes have revealed cautious optimism among investors. Inflation is easing, and the labor market seems to be holding strong which has set up a stage for gradual rate cuts. The Federal Open Market Committee (FOMC) has reportedly lowered rates by 25 bps to 4.5%-4.75% in November with an aim for a neutral policy stance.


The global crypto market recorded a mild correction in the last 48 hours as Bitcoin (BTC) price dropped below the $93,000 mark straight from missing a chance to hit $100k. The cumulative crypto market cap declined by more than 2% in the last 24 hours to stand at $3.19 trillion.


Trump’s next move in focus


According to reports, inflation remains above the Fed’s 2% target but officials have seen progress, while rent costs and restrictive policies are expected to keep inflation on a downward path. The labor market data has shown some resilience. Despite October’s weak payroll data due to storms and strikes in the US, layoffs remained low.


Uncertainty is hovering around the neutral rate now where policy neither boosts nor restrains growth. However, there are certain slow adjustments are being planned out to avoid oversteering. The market confidence in a December cut still remains mixed but lower than 60% probability. It comes with concerns that President-elect Trump’s tariffs and deregulation could fuel inflation.


It added that the crucial meeting didn’t mention the US presidential elections in the minutes, nor was there a staff notation of the stock market volatility increased before November 5. It didn’t carry any talks over the fiscal policy implications


The officials had agreed that inflation is all controlled and the chances of an unexpected surge in unemployment are quite low. There are still some participants who mark that the Committee could halt easing the policy rate. This can be done if inflation remains too high ahead.


Over $11B Bitcoin options set to expire


Bitcoin’s failure to hit $100,000 after a massive bullish rally had sparked fears of a downward move among the investors. After hitting the all time around of $99,800 on November 22, the BTC price dropped by over 8% to the $91k level. Despite a 120% surge this year, a heavy shift in options activity can be seen in the market.


$11.8 billion in options are set to expire on December 27 and crypto traders are preparing for a potential major move from here. This implies that Bitcoin could fall to $81,493 or soar to $115,579 and it holds a 68% probability of such a price move. BTC is trading at an average price of $93,149 at press time. Its 24-hour trading volume is up by $91.7 billion.


From Zero to Web3 Pro: Your 90-Day Career Launch Plan

* The content presented above, whether from a third party or not, is considered as general advice only.  This article should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments.

goTop
quote
Do you find this article useful?
Related Articles
placeholder
Forex Today: US Dollar consolidates weekly gains as focus shifts to US confidence dataThe action in financial markets remain relatively subdued early Friday and the US Dollar (USD) Index consolidates its weekly gains at around 98.50.
Author  FXStreet
15 hours ago
The action in financial markets remain relatively subdued early Friday and the US Dollar (USD) Index consolidates its weekly gains at around 98.50.
placeholder
Dollar extends weekly rally as strong data delays fed cutsThe U.S. dollar looks set to record a second straight weekly rise against other major economies, driven by strong economic data that have eased worries about Fed rate cuts.
Author  Cryptopolitan
17 hours ago
The U.S. dollar looks set to record a second straight weekly rise against other major economies, driven by strong economic data that have eased worries about Fed rate cuts.
placeholder
USD/CAD trades with negative bias below mid-1.3700s, lacks bearish convictionThe USD/CAD pair drifts lower during the Asian session on Friday and moves away from a three-and-a-half-week high, around the 1.3775 region touched the previous day.
Author  FXStreet
17 hours ago
The USD/CAD pair drifts lower during the Asian session on Friday and moves away from a three-and-a-half-week high, around the 1.3775 region touched the previous day.
placeholder
US Dollar Index holds losses near 98.50 ahead of Michigan Consumer SentimentThe US Dollar Index (DXY) is retracing its recent gains from the previous session and hovering around 98.50 during the Asian hours on Friday.
Author  FXStreet
17 hours ago
The US Dollar Index (DXY) is retracing its recent gains from the previous session and hovering around 98.50 during the Asian hours on Friday.
placeholder
USD/CHF tumbles to below 0.8050 on tariff uncertaintyThe USD/CHF pair tumbles to around 0.8030 during the early European session on Friday.
Author  FXStreet
17 hours ago
The USD/CHF pair tumbles to around 0.8030 during the early European session on Friday.
Real-time Quote