Anticipate Cryptocurrency Market Fluctuations: Investors Brace Themselves as Potential Interest Rate Reductions from the Federal Reserve approach
The Federal Reserve is set to make a significant move, with a likely interest rate cut on September 17, according to the FedWatch Tool on the CME Group website. The probability of a rate cut has remained over 95% in recent days, with the sentiment around a possible rate hike remaining at 0%.
As of writing, the FedWatch Tool shows a 96.1% probability of the Fed cutting interest rates. If the cut happens, the expected mortgage rates are expected to drop to 4.0%-4.25%. This move is anticipated to encourage more risk-taking, especially in the crypto market, which is expected to soar if an interest rate cut occurs.
In the past week, Dogecoin has risen over 97%, and its open interest has hit a new all-time high (ATH). The volatility in the first few hours following the mortgage rates announcement is expected to be quite high. It's prudent to watch how the market unfolds before investing, given the expected volatility.
Meanwhile, in the crypto world, Coinbase's XRP reserves have seen a 90% crash, indicating potential investor accumulation.
The chairman of the Federal Reserve, Jerome Powell, is scheduled to request a possible change in the sanction policy on September 17, 2021. The market watchers' view of the FOMC meeting is not elaborated upon.
It's important to note that an interest rate hike would definitely crash the stock market, but if the Fed chooses to keep mortgage rates the same, it wouldn't be as bullish for the markets but wouldn't exactly be bearish either.
There is no information provided about what happened the last time the Fed chose to keep mortgage rates the same or what happened the last time Dogecoin open interest hit a new ATH. However, given the current market trends, it's clear that the upcoming mortgage rates decision will have a significant impact on the stock market.
In conclusion, the expected mortgage rates cut could boost the crypto market, but investors should remain cautious due to the expected volatility. It's crucial to keep a close eye on the stock market developments in the coming days.
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