The market is at a standstill. Tomorrow, the Fed will announce its decision on the interest rate, and this event could set the tone for the coming weeks. The focus is not only on the numbers but also on Jerome Powell’s rhetoric.
The intrigue is intensifying. This meeting is considered one of the key ones, and for Powell, it could be his last as Fed chair.
The Market Expects Almost No Rate Changes
Expectations are set. Most participants are confident that the rate will remain unchanged in the range of 3.50–3.75%. This scenario is already priced in.
The main thing is not the decision, but the comments. Investors will look for hints about the next steps, especially regarding the timing of a possible rate cut.
Inflation Creates Uncertainty Again
The backdrop remains complicated. The latest data showed rising inflation, largely due to higher oil prices and tensions in the Middle East.
This makes the Fed’s task more difficult. On one hand, the economy needs easing, but on the other, inflation risks prevent a quick move to rate cuts.
Powell’s Rhetoric Will Be a Key Factor
The market will dissect every word. Even small changes in wording can affect expectations.
If Powell makes it clear that inflation remains a problem, the market may revise its rate-cut scenarios. If softer signals are heard, this will support risk assets.
Why This Meeting Is Especially Important
The context is changing. The Fed is approaching a point where the old policy no longer provides clear guidance, and new decisions require caution.
An additional factor is the possible change in leadership. Donald Trump’s candidate, Kevin Warsh, has already signaled a tougher approach to inflation and balance sheets.
What This Means for Bitcoin
Bitcoin depends directly on liquidity. The softer the Fed’s policy, the more interest there is in risk assets.
Right now, the market is in wait-and-see mode. The lack of clarity keeps the price in a range, and any deviation from expectations could trigger a sharp move.
Two Scenarios After the Meeting
The first scenario is neutral. The rate remains unchanged, the rhetoric is cautious, and the market continues to move within the range.
The second scenario is a shift in expectations. Tougher signals may increase investor caution, while softer ones could revive risk appetite.
Volatility May Rise Sharply
Such events rarely pass quietly. Even with an expected decision, the market often reacts to the details. This is especially true for cryptocurrencies. They react to changes in expectations faster than traditional assets.
What's Next?
The Fed’s next steps will set the direction. If inflation starts to slow, the market will return to the rate-cut scenario. If not, the waiting period will drag on. In this case, movement will remain limited, and reactions to news will intensify.
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