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Fed Hints at Gradual Rate Cuts: Crypto Market Responds

Published 11/27/2024, 08:56 AM
Updated 11/27/2024, 12:30 PM
Fed Hints at Gradual Rate Cuts: Crypto Market Responds
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U.Today - A summary of the Fed's November meeting minutes was published on Tuesday, with Fed officials expressing confidence that inflation is falling and that future interest rate decreases might be gradual.

The Fed minutes stated that future interest rate cuts were likely, but they would occur "gradually." The minutes were connected to the Federal Reserve's most recent policy meeting earlier this month, when it cut its benchmark lending rate by a quarter point to 4.50% to 4.75%.

"In discussing the outlook for monetary policy, participants anticipated that if the data came in about as expected, with inflation continuing to move down sustainably to 2 percent and the economy remaining near maximum employment, it would likely be appropriate to move gradually toward a more neutral stance of policy over time," the minutes stated.

The central bank began decreasing the Fed funds rate in September, and the Open Market Committee's next meeting is scheduled for Dec. 17-18.

Crypto market reacts

Cryptocurrencies rose in the early Wednesday trading session as investors evaluated the latest Federal Reserve meeting minutes and major economic data due this week.

Bitcoin climbed to $93,000 after falling to a two-day low of $90,742 during Tuesday's trading session.

Several crypto assets were up, including XRP (6%), and Cardano and Stellar up 10%. Aave and Algorand were up 13%, while Zcash rose 23%.

The minutes came one day ahead of key inflation data, the October personal consumption expenditures price index, which will be announced on Wednesday. The PCE is the Fed's preferred inflation index, and it informs monetary policy choices.

A slew of economic data is anticipated to be released on Wednesday, ahead of Thanksgiving on Thursday, when markets are closed. Traders are expecting a 66% possibility that the Fed will lower rates by a quarter point at its next December meeting, with 33% expecting no change.

This article was originally published on U.Today

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