Odds of a December rate hike surge to 81.5%! Could the Fed tap the brakes on the market again?
On November 5, data from the CME FedWatch Tool showed that markets currently see only an 18.5% chance that the Fed will leave rates unchanged in December, while the probability of a 25-basis-point hike has climbed to 81.5%.
Looking ahead to January, markets see a 67.1% chance of a cumulative 25-basis-point hike, an 18.7% chance of a cumulative 50-basis-point hike, and just a 14.2% chance that rates will remain unchanged.
Put simply, markets are betting that the Fed will continue tightening monetary policy. The higher interest rates go, the more expensive borrowing becomes, and investors typically grow more cautious, potentially putting greater pressure on risk assets.
For the crypto market, this is a signal that shouldn’t be ignored. If expectations of rate hikes continue to rise, BTC and altcoins could be affected by tighter liquidity. However, keep in mind that CME data reflects market expectations and does not mean the Fed has made a decision. Key things to watch next are inflation and employment data, as well as the latest comments from Fed officials.$ELSA $JCT $APP
On November 5, data from the CME FedWatch Tool showed that markets currently see only an 18.5% chance that the Fed will leave rates unchanged in December, while the probability of a 25-basis-point hike has climbed to 81.5%.
Looking ahead to January, markets see a 67.1% chance of a cumulative 25-basis-point hike, an 18.7% chance of a cumulative 50-basis-point hike, and just a 14.2% chance that rates will remain unchanged.
Put simply, markets are betting that the Fed will continue tightening monetary policy. The higher interest rates go, the more expensive borrowing becomes, and investors typically grow more cautious, potentially putting greater pressure on risk assets.
For the crypto market, this is a signal that shouldn’t be ignored. If expectations of rate hikes continue to rise, BTC and altcoins could be affected by tighter liquidity. However, keep in mind that CME data reflects market expectations and does not mean the Fed has made a decision. Key things to watch next are inflation and employment data, as well as the latest comments from Fed officials.$ELSA $JCT $APP
