The United States Federal Reserve is all set to hold the meeting of its Federal Open Market Committee (FOMC). Officials will decide whether to raise the benchmark interest rate for November on November 1st-2nd. The rate increase is now priced in at 0.75% (75 basis points). The odds of an increase of less than 0.75% are at 19%, according to CME Group’s FedWatch Tool. 2022 has so far been an economical disaster, for both stock and crypto markets. Many are worried that rising costs will tip global economies into a recession.
The move will mirror the Fed’s two prior hikes, which were made in September and July, respectively. Nonetheless, the markets are also looking for indications of a change in the pace of quantitative tightening (QT).
The rates announcement, a supporting statement, and economic forecasts are due on Wednesday at 2:00 EST. At 2:30 pm EST, Fed Chair Jerome Powell will subsequently give a speech, providing the context for market movements.
How will crypto markets react?
There is already discussion of the aggressive policy that was implemented about a year ago coming to an end as consecutive rate hikes start to trend toward neutral. This might finally give crypto markets and risk assets in general some real growth fuel as conditions ease.
However, in the near term, analysts anticipate a typical response to the approaching FOMC announcement.
the crypto markets received some relief in the previous week. Bitcoin (BTC) managed to get past the $20K barrier. On the other hand Ethereum (ETH) got past the $1.6K level. Regardless, there could be some volatility in anticipation of the interest rate hike, which is usual in such times. Many compare this years bear market, to that of 2018’s. On-chain analytics platform CryptoQuant stated in a study published late last week that while Bitcoin is moving towards a bottom out, the market has not yet reached that point.