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$105,885 prices continue to fluctuate in the wake of significant developments this week. In the upcoming weeks, we will witness even more major events. For instance, a month from now, Trump will assume the presidency, leading several key regulatory changes including the appointment of crypto-friendly officials in institutions like the SEC. However, the continuity of the Fed’s interest rate cuts remains crucial.
Fed’s Interest Rate Decision
The Fed’s recent interest rate cut could pave the way for significant gains on the regulatory front. October’s inflation figures exceeded expectations, marking an increase after several months. Although the November data showed a slight rise, it remained within anticipated levels. While markets expect a 25 basis point cut from the Fed, investors expressing concerns about signs of a pause in rate cuts dominated discussions during this meeting.
The Fed announced a 25 basis point cut in interest rates. You can follow real-time updates regarding the economic outlook and details of the decision. Furthermore, important statements from Powell will be shared shortly after this announcement in a new article.
Fed’s Projections
- Fed’s median interest rate projection for the next two years is 3.375% (forecast 3.125%).
- Fed anticipates the unemployment rate at 4.3% by the end of 2025.
- Inflation projections for 2025 show 2.5% PCE inflation compared to 2.1% in September.
- Fed maintains long-term GDP growth projections at 1.8%, unchanged from September.
- Fed will evaluate new data and risks when considering further adjustments.
- Some officials, like Hammack from Cleveland, oppose further rate cuts.
- Futures markets price in a 90% likelihood of no rate changes in January.
- Fed sees inflation and employment risks as roughly balanced.
- Median view for Fed rates at the end of 2024 remains at 4.4%.
- Futures show only two rate cuts priced in for 2025.
- The Fed’s policy statement shows little change and reaffirms robust economic growth.
At 22:30, Powell will give a speech, and details will be available in real time.
