Fed Signals Halts Rate Cut Odds for December
- Fed signals reduce December rate cut odds, influencing markets.
- Odds of rate cut now below 50% due to hawkish tones.
- Crypto markets see volatility amid policy uncertainty.
The probability of a December Federal Reserve rate cut has sharply declined below 50%, primarily due to hawkish signals from Federal Reserve officials and the cancellation of the October jobs report.
This shift impacts financial markets as global liquidity expectations adjust, causing significant implications for cryptocurrency assets like Bitcoin and Ethereum amid heightened economic uncertainty.
The probability of a December rate cut by the Federal Reserve has fallen significantly. Key figures such as Jerome Powell have indicated a cautious approach amid rising inflation concerns and the canceled October jobs report.
Jerome Powell, Susan Collins, and Jeff Schmid are major players influencing this decision. Powell noted differing views within the FOMC, while Collins warned of inflation risks. Schmid dissented from more easing. As Powell stated, “There are strongly differing views within the committee and a growing chorus to at least wait a cycle before another reduction.”
The immediate effects include significant market reactions, with hit traditional and digital assets due to shifted policy expectations. Liquidity concerns have grown, impacting BTC and ETH as uncertainties rise.
This shift in policy affects financial markets, decreasing the likelihood of a December rate cut. It contributes to cautious sentiment towards risk assets, pressuring both traditional and crypto markets.
Risk assets experience heightened volatility due to rate cut expectations changing. Crypto markets respond by showcasing decreased leverage and shifting liquidity to safer holdings amid uncertain policy climates.
These events highlight potential for tighter financial regulation and limited liquidity. Historical data suggests risk-off trends during data blackouts. Without the October jobs report, policy decisions lack key economic signals.
