Key takeaways
- The Federal Reserve is likely to implement a quarter interest rate cut in December with a 96.9% probability.
- Bitcoin has remained resilient, maintaining trading levels above $100,000 amid monetary policy changes.
The Federal Reserve is expected to cut interest rates by a quarter point at its upcoming December meeting, lowering the benchmark interest rate to a range of 4.25% to 4.50%, according to a Bloomberg reports.
This expected move is in line with market expectations, as indicated by CME FedWatch Toolwhich shows a 96.9% probability of the decrease.
If implemented, it would mark a full percentage point decline since September, highlighting the Fed’s ongoing efforts to manage economic conditions.
Market forecasts indicate fewer rate cuts in the coming year as inflation remains persistent and economic growth continues to show strength.
This outlook is bolstered by the core consumer price index, which has increased by 3.3% year-on-year and has been consistently elevated since June.
In addition to this, labor market data reveal a reversal in unemployment trends, with the latest job figures showing a remarkable recovery, further supporting the economy’s resilience.
These economic indicators, along with inflationary pressures from President-elect Trump’s proposed tariffs and tax cuts, have shifted the focus from employment to inflation.
While the Fed is expected to cut rates next week, economists predict the pace of cuts could slow in 2025, with only three cuts expected due to persistent inflation and solid economic growth.
Amid this backdrop, Bitcoin has shown surprising strength.
In recent days, Bitcoin’s performance has been bolstered by macroeconomic data, including CPI, non-farm payrolls and unemployment, along with significant developments in US leadership.
Fed Chairman Jerome Powell has highlighted Bitcoin’s growing prominence by describing it as a “competitor to gold.”
Adding to this momentum, President-elect Trump’s nominations of Paul Atkins as SEC chairman and David Sacks as crypto tsar further reinforce Bitcoin’s potential strength heading into 2025.
News of a potential Fed rate cut next week is also adding to Bitcoin’s resilience, which could support its strong performance in the near term.
