The likelihood of the Federal Reserve enacting a rate cut in December has significantly decreased, falling below 50%, according to recent data and statements from Fed officials. This shift is impacting market expectations, affecting valuations of both traditional financial assets and cryptocurrencies. 📈 🪙 📉
Market reactions indicate this change in probability has influenced macro asset valuations and cryptocurrencies such as Bitcoin (BTC) and Ethereum (ETH). The possibility of fewer anticipated rate cuts could stall the momentum for these digital currencies.
For instance, DeFi protocols reliant on leveraged borrowing could experience significant shifts in their operations. Stablecoin minting, a key indicator of DeFi activity, may also be affected by the changing dynamics. 🏛️ 🤝,
The Federal Open Market Committee (FOMC), led by Chair Jerome Powell, is expected to provide further guidance on this matter. Notably, he stated that the December rate cut decision is not yet certain, underscoring the continued volatility and uncertainty in the financial markets.