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Former Cleveland Fed President Loretta Mester highlighted the possibility of a Federal Reserve interest rate cut during the upcoming FOMC meeting in November. Mester indicated that a 25 basis point cut seems quite straightforward at this juncture and elaborated on her reasoning.
Rationale Behind the Rate Cut
Mester expressed that inflation has significantly dropped from its peak, and although the Fed’s 2% target has not yet been met, a 25 basis point rate cut is reasonable. She emphasized that the inflation data following the September FOMC meeting has maintained confidence in the ongoing decline of inflation.
President Mester noted that the unemployment rate has stabilized, and job data indicates a healthy labor market. Therefore, as the U.S. economy returns to normalcy, the Fed will need to implement monetary easing policies.
Mester’s comments came after the announcement of U.S. employment data for October, which showed a rise of only 12,000 in non-farm payrolls, falling short of the expected 110,000. The unemployment rate remained steady at 4.1%.
“I was pleased that the unemployment rate held steady because it shows the U.S. economy isn’t weaker than the non-farm payroll figures suggested.”
Impacts on Cryptocurrency Markets
A 25 basis point Fed rate cut could serve as a catalyst for Bitcoin 
$102,804 prices to surpass their current all-time highs. Following the 50 basis point cut from the September FOMC meeting, Bitcoin and the broader crypto market responded positively.
The interest rate decision will be announced just two days after the November 5 U.S. presidential elections. A rate cut following the elections could create an ideal environment for reviving BTC and the crypto market.
Arthur Hayes, co-founder of BitMEX, suggested that the crypto community should focus more on the Fed’s decision than the U.S. election. He argued that the election results would not impact BTC, but instead, money printing and increasing U.S. debt issuance could support Bitcoin.
The anticipated 25 basis point rate cut at the Fed’s November meeting could have significant effects on both the economy and cryptocurrency markets. Economic indicators and political developments are closely monitored for their influence on this decision.
