Oh, the crypto market, ever the optimist, believes the Fed will be as gentle as a lamb… which, of course, it isn’t. 🐑💸
“Markets are underpricing the likelihood of rapid rate cuts,” sighed Economist Timothy Peterson, as if the Fed were a mischievous child with a penchant for chaos. 🤡
“There has never been a gradual reduction in rates like that currently envisioned by the Fed,” he declared, as if the central bank were a particularly dramatic opera singer. 🎭
“It will jolt Bitcoin and alts up substantially, and I think that will happen in the next 3-9 months.” 🚀
Peterson’s comments come just days after the Fed implemented its first rate cut of 2025 on Sept. 17 by 25 basis points, a highly expected event by the majority of the market, with 96% odds on the day, and a 4% probability of the rates being reduced by 50 bps, according to the CME FedWatch Tool. 🧮
Market is anticipating another rate cut in October
Bitcoin (BTC) briefly surged to $117,000 hours before the Fed’s rate cut announcement but has since retreated to levels seen in the days prior, trading at $115,570 at the time of publication, according to CoinMarketCap. 🐭💸
CME data shows that market participants are pricing in a 91.9% chance of another 25 basis point rate cut at the Oct. 29 meeting, with only an 8.1% probability that rates remain unchanged. 🙏💸
Fed officials said they two more quarter-point rate cuts this year. However, Fed Chair Jerome Powell said, “We’re not on a pre-set path.” A path? What path? 🧭🌀
Financial institutions were split on Fed’s next move
Some financial institutions expected a more aggressive rate cut at the September meeting, with Standard Chartered forecasting a 50 basis point reduction. A bold move, indeed. 🎩🐇
Goldman Sachs CEO David Solomon, however, was more confident that the Fed would stick to a 25 basis point cut. A cautious one, as always. 🚶♂️
Lowering interest rates tends to be bullish for risk-on assets, including cryptocurrencies, as traditional investments like bonds and term deposits become less lucrative to investors. 📈
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2025-09-20 05:47