The Bitcoin market fell almost 3% after the United States Federal Reserve hinted that further interest rate cuts might not be coming, contrary to expectations from those in the crypto and wider financial market.
“The economy is not sending any signals that we need to be in a hurry to lower rates,” said Federal Reserve Chair Jerome Powell during a speech in Dallas, Texas, on Nov. 14.
Powell’s statement came after two recent rate cuts in September and November of 50 and 25 basis points, respectively. The next Fed interest rate decision is set to be announced on Dec. 18.
Bitcoiners keep a close watch
“The strength we are currently seeing in the economy gives us the ability to approach our decisions carefully. Ultimately, the path of the policy rate will depend on how the incoming data and the economic outlook evolve,” Powell added.
Following Powell’s speech, Bitcoin’s (BTC) price declined about 2.79% to $86,979, according to CoinMarketCap data. At the time of publication, the price had recovered to $88,100.
Bitcoin is down 2.74% since Nov. 14. Source: CoinMarketCap
Traders’ confidence in a December rate cut has weakened, as “odds of a 25 basis points rate cut are down to just 59%,” trading resource The Kobessi Letter said in a Nov. 14 X post.
“The ‘Fed pivot’ is being undone once again,” The Kobessi Letter added.
Interest rates are an important indicator for Bitcoiners
Bitcoiners are closely eyeing whether the Fed will cut the interest rate, as lower interest rates make perceived safer assets like bonds and term deposits less lucrative, leading investors to consider riskier and alternative investments like Bitcoin and tech stocks.
Related: Bitcoin price could fast-track to $100K high in November — Analysts
Meanwhile, on Nov. 14, US inflation data marginally exceeded market expectations. On the same day, the October US Producer Price Index (PPI) showed a 2.4% annual increase, slightly above the 2.3% consensus. The inflation data, being close to expectations, may be another factor reducing the urgency for the Fed to adjust interest rates.
It comes amid concerns about the potential effects of some of Trump’s stated economic policies.
Economist Nouriel Roubini told ABC News on Nov. 14 that while some of Trump’s policies may increase growth and inflation, “being pro-business, low tax rates for the corporate sector, deregulation and more production of fossil fuels,” other policies on tariffs, trade wars and immigration may lead to “higher interest rates.”
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This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.