As a seasoned analyst with over two decades of market experience under my belt, I find myself braced for volatility in the aftermath of the Federal Reserve meeting. The consensus among economists leans towards a 25-basis point rate cut, but the significant shift in market players’ expectations towards a 50 bps cut over the past few days is intriguing.
In anticipation of the upcoming Federal Reserve meeting, investors considered the potential for interest rate reductions and speculated on the impact these changes could have on various asset prices throughout the next few months.
114 economists surveyed by Bloomberg indicated that 104 of them anticipated the Federal Reserve to lower interest rates by 0.25% for the first time in four years. On the other hand, 9 analysts predicted a more significant reduction of 0.50%.
Based on QCP Capital’s analysis, which uses Fed Fund Futures pricing as a guide, it appears that approximately two-thirds (66%) of market participants expect the Federal Open Market Committee to raise interest rates by 0.5 percentage points during their meeting on Wednesday, September 18. On the other hand, there is a one-third (33%) chance that they might lower rates by 0.25 percentage points instead.
According to the CME FedWatch data from September 16th, there’s a 61% chance of an event happening. However, only a week ago, traders estimated that the probability of a 50 basis points reduction was just 14%.
According to QCP Capital’s analysis, it remains uncertain how interest rate reductions will affect financial markets at this point. In a communique to investors, QCP further explained that the specific monetary policy decision, future Dot plot projections, and Jerome Powell’s comments following the FOMC meeting could all play significant roles in shaping price dynamics.
As a researcher, I am anticipating that the upcoming days will witness increased market volatility, given that traders are likely to reposition themselves following our recent meeting. Over the coming weeks, it’s reasonable to expect these adjustments to unfold. Moreover, the regime change could potentially mark the inception of robust macroeconomic trends.
QCP on possible price swings post-FOMC
In the hours leading up to the FOMC meeting, the overall value of cryptocurrencies dropped approximately 4%. Within the past day, Bitcoin (BTC) and Ethereum (ETH) each decreased by more than 2%. Notable altcoins such as Solana (SOL), Ripple (XRP), Dogecoin (DOGE), and Toncoin (TON) also experienced a decline.
Supporters argue that more available funds could speed up price increases in an economy with low interest rates. In particular, as we approach the last quarter of the year, many investors anticipate traditional trends to continue and expect prices to rise significantly.
In simpler terms, Jamie Dimon, CEO of JPMorgan, downplayed the Fed’s policy change (FOMC meeting and Fed’s pivot), suggesting it was a relatively small matter compared to significant global events such as political conflicts in Europe and the Middle East that should be given more attention.
As a researcher, I’m sharing my perspective on the recent comments made by Jamie Dimon, CEO of JPMorgan. He has downplayed the potential impact of a potential 0.25% or 0.5% interest rate cut from the US Federal Reserve. Dimon underscored that these adjustments are relatively minor when considering broader economic issues. He also highlighted geopolitical factors as significant influences on the economy, suggesting that these rate cuts might not be “earth-shattering” in comparison.
— Mario Nawfal (@MarioNawfal) September 18, 2024
Read More
- BODEN PREDICTION. BODEN cryptocurrency
- GHST PREDICTION. GHST cryptocurrency
- BETA PREDICTION. BETA cryptocurrency
- STRD PREDICTION. STRD cryptocurrency
- Mango Markets Exploiter Found Guilty Of Fraud And Manipulation
- GBP EUR PREDICTION
- MATIC PREDICTION. MATIC cryptocurrency
- LOOKS PREDICTION. LOOKS cryptocurrency
- BRN/USD
- TNSR PREDICTION. TNSR cryptocurrency
2024-09-18 19:50