The FOMC meeting is currently above financial markets, including bitcoin, noting that it is only a few days away. Past interest rate hike trends and the fact that inflation remains a major threat have given rise to a negative outlook for the FOMC meeting. It is expected that another Fed interest rate hike is on the horizon, which will undoubtedly have a profound effect on the crypto market.
FOMC meeting is drawing near
The next meeting of the FOMC will be held on November 1-2, as per the official schedule. This happens once every one to two months and is important because this is where the Fed decides what to do with the economy and keep it healthy.
Unlike previous years, 2022 has been a very difficult year not only for the economy of the United States, but for economies around the world. Inflation is reaching levels not seen in decades and the Fed has had to tighten its policy in response.
Interest rate hikes have been a common practice for the past few months, higher than expected in most cases, in most cases. This Time, Woo Is in the Blockchain Told That the expected interest rate increase is 75 bps, with an 81% chance of this happening. If it plays out like this, it would be the fourth consecutive 75 bps interest rate hike by the Fed, which could have negative consequences for assets in the crypto space like bitcoin.
Next week on November 2, the United States Fed will announce the interest rate decision, and the probability of a 75bps increase in interest rates is currently 81%. The US unemployment rate for October will be released on November 4. https://t.co/nGgrVQN0to
— Wu Blockchain (@WuBlockchain) 31 October 2022
How will bitcoin react?
Bitcoin’s past performance in relation to interest rate hikes by the Fed can often be a guide for what to expect in the future. If the current prediction for another 75 bps turns out to be correct, it will be an extremely volatile week for the bitcoin and crypto market.
BTC continues to trend upward | Source: BTCUSD on TradingView.com
Back in September when the Fed last raised interest rates, the price of bitcoin was gave a lot of negative feedback, In fact, this would prove to be the most volatile reaction to the FOMC meeting, as the price of BTC fell by more than 5% in a minute. It was moving away from three consecutive interest rate hikes.
Another hike in interest rates this week is expected to bring more volatility in the market. This will also coincide with the gains currently underway due to bitcoin’s recovery of over $20,000. This could be the last straw that takes the digital asset below $20,000 again.
However, the hike in interest rates is not expected to continue indefinitely. This trend is likely to see a reversal in 2023, presenting a growth opportunity for riskier assets such as biotin.
Featured image from Coinews, chart from TradingView.com
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