The FOMC Anticipates a Pause in Rate Hike, Bitcoin Set to Rally

The U.S. Federal Reserve’s Federal Open Market Committee (FOMC) is set to announce its decision on the rate hike this Wednesday. The FOMC is expected to maintain the target range for the federal funds rate at 5.25%-5.5%, a 22-year high. This comes after Fed Chair Jerome Powell signaled that the committee would assess the impact of recent rate hikes as they conclude their rate-hiking campaign.

Despite inflation remaining above the U.S. Fed’s 2% target, the FOMC committee is anticipated to announce a “pause” for the second time this year. However, if inflation rises, the Fed could increase interest rates by another 25 basis points by the end of the year.

Bitcoin on the day of this storysnapshot 20 Sep 2023

Day open

$27,210

00:00 UTC

Past 7 days

+5.3%

from $25,840

Since the open

+140%

$65,207 · 15 Nov, 22:20 UTC

Record close

−59.7%

$67,526 · Nov 2021

Data: Binance, CoinGeckoLive Bitcoin price →

The annual PCE rate, the Fed’s preferred inflation gauge, rose to 3.3% in July from 3% in June. The job market has cooled, with the unemployment rate increasing. 

Wall Street giants, including JPMorgan, Goldman Sachs, Morgan Stanley, Barclays, BNP, BMO, Bloomberg, Nomura, RBC, and Wells Fargo, have forecasted a pause. However, Raymond James and Mizuho expect a 25 basis points hike.

The CME FedWatch Tool indicates a 99% likelihood of a halt at the next FOMC meeting on September 20. Meanwhile, the US dollar index (DXY) remains above 105, putting pressure on the BTC price.

Bitcoin Has Responded Ahead of Announcement

Bitcoin’s price has jumped 1% in the past 24 hours, currently trading at $27,144, according to data provided by CoinMarketCap. However, the price remains unstable as the crypto market awaits the Fed’s monetary policy decision.

Bitcoin has climbed 5% in a week as traders anticipate significant upside momentum after the FOMC. This could bring back the much-needed bullish sentiment amid better technical chart patterns.

In conclusion, the upcoming FOMC meeting could have significant implications for both the U.S. economy and the cryptocurrency market. As the world watches, the potential pause in the rate hike could trigger a rally in Bitcoin prices.