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Market expectations of a Fed rate cut in November increased from 67.9% to 83.7%.
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This week, the market will be influenced by key economic data such as CPI and PPI.
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Crypto markets face selling pressures despite optimism in equities.
Officials at the Federal Reserve meeting in 2024 expressed a cautious approach to inflation, suggesting the central bank is not confident about its ability combat rising prices. Investors are now expecting a 25-bps interest rate cut in November. The probability has increased from 67.9% last week to 83.7%.
The latest Fed Minutes show a less positive outlook on inflation, as the central bank continues to fight against inflation. The strong payroll numbers from last Friday fueled speculation about a rate reduction. The probability of a rate cut has increased dramatically, and is now above 80%.
Read Also : Fed Rate Cut : Dividend ETFs & Crypto See Massive Inflows
The Fed’s recent rate cut has sparked a rally on both the stock and cryptocurrency markets. In September, U.S. Dividend ETFs saw a surge of inflows. They attracted $3.05 billion. Bitcoin’s gains matched the overall crypto market’s 15% rise. Bitcoin jumped from $57.627 just 24 hours prior to the Fed announcement to $66,508 by September’s end.
All eyes are now on the CPI and PPI reports that will be released tomorrow, which are important indicators of inflation. These data reports will help us understand how the US economy is doing as inflation slows down. They will also be accompanied by major bank earnings from JPMorgan Chase and Wells Fargo.
Crypto Traders Still Hold on to “Uptober Hope” Despite Selling Pressure
The cryptocurrency market did not follow the S&P500’s surge last night. The selling pressures in crypto increased, exacerbated due to the continued dumping Silk Road Bitcoin and PlusToken Ethereum. Despite this, traders are still hopeful of an “uptober rally” as long as Bitcoin remains above the critical $60,000 level.
Read Also : Interest rate cut vs. inflation: The Fed’s dilemma and Crypto’s future
Investors are locking in yields to the current low levels, as the market is expecting more rate cuts. They also want to be prepared for a possible year-end rally.
The next few days are crucial for both the traditional and crypto markets. With CPI and PPI numbers in and growing expectations of a rate reduction, market participants will be looking for a rate cut. Investors need to prepare for volatility and opportunities.
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