FOMC Meeting: What is it, Latest Developments, and the Impact on Crypto?

Bittime - FOMC (Federal Open Market Committee) is a committee under the Federal Reserve that is responsible for monetary policy in the United States. This can affect the crypto market so that Bitcoin CS can go up or down.

What is the FOMC Meeting?

The FOMC Meeting is an annual meeting for evaluate economic and financial conditions, and determine appropriate policies to maintain price stability and sustainable economic growth. 

The FOMC holds regular meetings eight times a year, and in 2023, one of the most important meetings will take place in September.

FOMC Latest Developments: Interest rate cuts on the horizon

In its latest meeting, it is predicted that the Fed will end the high interest rate policy that has been implemented for the last 2.5 years. Many economists and market players predict a cut in interest rates of 25 basis points, which would be the first cut in 4.5 years. 

However, recently there has been strong speculation that cuts could reach 50 basis points. Data from the CME Fed Watch Tool showed that the probability of a cut of 50 basis points jumped to 63%, up sharply from just 17% in the previous week.

The main cause of this speculation is that core inflation remains high, even though headline inflation has fallen to 2.5%. Core inflation is still around 3.2%, which shows that the Fed's high interest rate policy is not effective enough to suppress prices overall. 

Analyst Tom Simons from Jefferies said that in conditions of uncertainty like this, quick and decisive steps are needed to avoid greater economic risks.

The Impact of Interest Rate Cuts on the Crypto Market

FOMC decisions have a big impact on financial markets, including crypto assets. When interest rates are cut, liquidity in the economy increases, which is often accompanied by a weakening of the value of the US dollar. 

For the crypto market, this could be a positive signal. With the dollar weakening, digital assets such as Bitcoin and Ethereum have the potential to increase in value as investors look for alternative stores of value.

Conversely, if the Fed decides to maintain or only slightly lower interest rates, the US dollar could remain strong, which would put pressure on crypto prices. This uncertainty makes crypto traders pay close attention to the results of the FOMC meeting.

2023 FOMC Meeting Schedule

The FOMC holds eight regular meetings throughout the year, this year's scheduled meeting will take place on September 19 - 20. Here's the complete schedule:

- January 31 - February 1

- March 21 - 22

- 2 - 3 May

- June 13 - 14

- July 25 - 26

- 19 - 20 September

- 31 October - 1 November

- 12 - 13 December

The FOMC decision is usually announced at 2 pm US Eastern time, followed by a press conference from Fed Chair Jerome Powell.

Conclusion: What to Expect from the FOMC Meeting?

The FOMC meeting not only has an impact on the United States economy, but also affects global markets, including crypto. If interest rates are cut further, crypto assets will likely get a positive boost. 

However, volatility remains a major challenge that investors and traders in this market must take into account.

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