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Bitcoin prices are experiencing notable fluctuations following pivotal developments this week, with more critical events expected in the near future. A significant change will occur when Trump takes office next month, which is anticipated to bring about several important regulatory changes, including the appointment of officials supportive of cryptocurrencies within institutions such as the SEC. However, the ongoing trajectory of the Federal Reserve’s interest rate cuts remains a key factor in this dynamic.
What Does the Fed’s Rate Cut Mean?
The Federal Reserve’s recent decision to cut interest rates could open doors for substantial advancements in regulatory policies. October’s inflation numbers surpassed expectations, reflecting an increase after several months of stagnation. Despite a modest rise in November data, the figures stayed within expected bounds. While market anticipations suggest a 25 basis point reduction, concerns about a potential halt in rate cuts were prevalent during discussions.
How Will the Fed Impact Economic Projections?
The Federal Reserve announced a 25 basis point interest rate cut. Continuous updates regarding the economic outlook and further insights from Powell are anticipated shortly after this announcement.
- The Fed’s median interest rate projection for the next two years is set at 3.375%.
- Unemployment is expected to reach 4.3% by the end of 2025.
- Inflation predictions for 2025 indicate a PCE inflation rate of 2.5%.
- GDP growth projections remain steady at 1.8%.
- The Fed will consider new data when making future adjustments.
- Some officials, including Hammack from Cleveland, oppose further cuts.
- Futures markets show a 90% chance of no rate changes in January.
- Inflation and employment risks are viewed as balanced.
- The median projection for Fed rates at the end of 2024 stands at 4.4%.
- Only two rate cuts are priced into futures for 2025.
- The Fed’s policy statement reaffirms strong economic growth trends.
In a scheduled speech at 22:30, Powell is expected to provide further insights, with details available in real-time.