30s Summary

The BTC market dropped around 3% after hints that the Federal Reserve (the Fed) may not cut interest rates as much as expected. Chair Jerome Powell stated there is no rush to cut rates due to prevailing economic strength. Powell’s statement contradicted prior speculation of a possible large rate cut. In response to the speech, Bitcoin’s price improved marginally to $88,100. Consequently, investors’ confidence for a December rate cut dropped to 59%. Meanwhile, US inflation data showed a 2.4% annual increase, slightly above the 2.3% expected. This article concludes with a reminder about the risks associated with cryptocurrency investments.

Full Article

The BTC market took a bit of a dive, around 3%, after the US Federal Reserve (aka. the Fed) dropped hints that interest rates may not be slashed as much as everyone was hoping for. The suggestion seemed to contradict what crypto and general finance folks were expecting could happen.

Fed Chair, Jerome Powell, made a speech in Dallas, Texas on November 14th stating that the economy isn’t indicating a rush to cut rates is needed. Powell’s words followed two recent rate cuts in September and November.

As Bitcoiners, we’re always watching events like this closely. Powell went on to say that the current economic strength allows us to play it safe, for now. Future policy changes will depend on how incoming data and the economic outlook shapes up.

In response to Powell’s speech, Bitcoin’s price took a dip, by about 2.79%, to $86,979. At the time of printing, it’s picked up a smidge to $88,100.

The confidence that the traders had for a December rate cut has taken a hit, with a slight drop to 59% for a 25 basis point rate cut, according to an expert analysis by The Kobessi Letter.

For Bitcoiners, interest rates are a key indicator. We’re always looking to see if the Fed will trim the interest rates, as it makes other, usually less risky assets like bonds, less appealing. This could lead investors to consider riskier options such as Bitcoin and tech stocks.

US inflation data was a little above expectations. Released on the same day, the October US Producer Price Index (PPI) revealed a 2.4% annual increase, which nudged just above the expected 2.3%. With the inflation data being somewhat in line with anticipated numbers, this might be another reason why the Fed doesn’t feel an urgent need to fiddle with interest rates.

In other news, there have been some worries about how Trump’s policies could affect growth and inflation. One economist, Nouriel Roubini, warned that while some of Trump’s policies might spur on growth and inflation, others could lead to higher interest rates.

It’s important to remember though, any investment comes with risks, and anyone thinking of putting their cash into crypto should do their research and consider all of the potential outcomes.

And that’s a wrap up on the latest BTC market news related to the US Federal Reserve.