As a seasoned crypto investor with a knack for deciphering market trends and economic indicators, I can’t help but feel a sense of deja vu when hearing about the latest Fed decision. Over the years, I’ve learned to navigate these turbulent waters with a mix of patience, strategic planning, and a good dose of humor.
In simpler terms, the price of Bitcoin dropped nearly 3% because the U.S. Federal Reserve suggested that there may not be any more reductions in interest rates, which was different from what many people in the cryptocurrency and broader financial markets had been expecting.
During a speech in Dallas, Texas on November 14th, Federal Reserve Chair Jerome Powell stated that the current state of the economy does not indicate an urgent need to reduce interest rates.
Following the consecutive reductions in interest rates by 0.5% and 0.25%, respectively, in September and November, I find myself eagerly anticipating the Federal Reserve’s upcoming rate announcement slated for December 18th.
Bitcoiners keep a close watch
With the economy’s current robustness, we can make our decisions thoughtfully. However, the direction of our monetary policy will be influenced by how new data and the overall economic forecast unfold,” Powell stated in summary.
After Powell’s talk, Bitcoin’s value dropped about 2.79%, down to roughly $86,979, as per information from CoinMarketCap. However, at the time this text was written, its price had slightly increased to around $88,100.
trader’s belief in a potential interest rate reduction by December has lessened, with The Kobessi Letter stating on November 14 that the chances of a 0.25% decrease have dropped to approximately 59%.
“The “Fed pivot” is being undone once again,” The Kobessi Letter added.
Interest rates are an important indicator for Bitcoiners
Investors who deal with Bitcoin are keeping a close watch on the possibility of the Federal Reserve reducing interest rates. Lower interest rates can diminish the attractiveness of more traditional investments such as bonds and term deposits, causing some investors to explore riskier and unconventional options like Bitcoin (BTC) and technology stocks.
On the same day, the US saw a small but unexpected rise in inflation as indicated by the October PPI, which increased by 2.4% yearly instead of the expected 2.3%. This data, while not significantly different from expectations, could potentially decrease the need for the Federal Reserve to alter interest rates immediately.
It comes amid concerns that Trump’s various policies could impact on economic growth and inflation.
On November 14th, economist Nouriel Roubini stated to ABC News that certain Trump administration policies could boost economic growth and inflation, such as business-friendly tax cuts, deregulation, and increased production of fossil fuels. However, he also warned that policies related to tariffs, trade wars, and immigration might result in higher interest rates.
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2024-11-15 05:46