Former Cleveland Fed President Loretta Mester focused on a possible rate cut during the November FOMC meeting. Mester stated that a 25 basis point cut seems quite straightforward at this stage and explained her reasoning.
Rationale for the Rate Cut
Mester expressed that inflation has significantly decreased from its peak, and although the Fed’s 2% target has not been met, a 25 basis point rate cut remains reasonable. She emphasized that the inflation data following the September FOMC meeting supports the notion of continued decline and maintains confidence in this trend.
President Mester noted that the unemployment rate has stabilized, with job data indicating a healthy labor market. Thus, as the U.S. economy returns to normal, the Fed will need to implement monetary easing policies.
Mester’s comments came after the release of U.S. employment data showing a 12,000 increase in Non-Farm Payrolls, falling short of the expected 110,000. The unemployment rate remained steady at 4.1%.
Loretta Mester suggested that the lower-than-expected job numbers might be linked to hurricanes affecting the U.S. last month.
“I was pleased the unemployment rate remained steady as it indicates the economy is not as weak as suggested by Non-Farm Payrolls.”
Impact on Cryptocurrency Markets
A 25 basis point Fed rate cut could catalyze Bitcoin 
$78,526 prices to surpass their all-time high. Following the 50 basis point cut at the September FOMC meeting, Bitcoin and the overall cryptocurrency market responded positively.
The rate cut decision will be announced just two days after the November 5 U.S. presidential elections. The anticipated rate cut post-elections could create an ideal environment for reviving BTC and the cryptocurrency market.
Arthur Hayes, co-founder of BitMEX, pointed out that the crypto community should focus more on the Fed’s decision than the U.S. election. Hayes argued that the election outcomes would not significantly influence BTC, but rather money printing and increasing U.S. debt issuance could support Bitcoin.
The anticipated 25 basis point rate cut in the Fed’s November meeting could have significant implications for both the economy and cryptocurrency markets. The impacts of economic indicators and political developments on this decision are being closely monitored.
