Cautious Anticipation: U.S. FOMC Nears Decision, Bitcoin Hovers Around $30,000

Cautious Anticipation: U.S. FOMC Nears Decision, Bitcoin Hovers Around $30,000

Crypto News – The U.S. Federal Reserve’s Federal Open Market Committee (FOMC) is gearing up for a highly anticipated announcement regarding its stance on interest rates this Wednesday. Forecasts suggest that the FOMC will opt to retain the target range for the federal funds rate at the current 5.25%-5.5%, a level not seen in over two decades.

Chairman Jerome Powell has indicated that the committee will carefully evaluate the consequences of recent rate hikes, signaling a potential end to the current rate-hiking spree. Despite inflation persisting above the U.S. Fed’s 2% target, the FOMC is likely to announce a “pause,” marking the second time this year. However, the Fed has not ruled out a 25 basis points hike towards the end of the year if inflation rates surge.

In July, the annual Personal Consumption Expenditures (PCE) rate, the Fed’s favored measure of inflation, rose to 3.3% from June’s 3%. Simultaneously, the job market has displayed signs of cooling, with the unemployment rate experiencing an uptick.

Notable financial institutions on Wall Street are anticipating a “pause” in September, though escalating oil prices pose a risk of reigniting inflationary pressures. JPMorgan, Goldman Sachs, Morgan Stanley, Barclays, BNP, BMO, Bloomberg, Nomura, RBC, and Wells Fargo have all predicted a pause, while Raymond James and Mizuho expect a 25 basis points hike.

“We anticipate the Fed will maintain current rates in tomorrow’s FOMC meeting while retaining a bias towards tightening. Our projection is that the 2023 median dot will still indicate one more hike within this year, and there’s a possibility of an upward revision in the longer-run dot.”

The CME FedWatch Tool reflects a 99% probability of a pause at the upcoming FOMC meeting on September 20. Meanwhile, the U.S. dollar index (DXY) remains notably above 105, posing potential downward pressure on the price of BTC.

Bitcoin Inches Closer to $30,000

In the past 24 hours, the price of Bitcoin (BTC) has experienced a 1% surge, with the current trading price at $27,144. The 24-hour price range oscillated between $26,918 and $27,488. However, the price remains volatile as the market eagerly awaits the Federal Reserve’s monetary policy decision.

Over the past week, Bitcoin has witnessed a 5% increase, bolstering the hopes of traders for a substantial upward momentum post the FOMC announcement. This upswing is anticipated to revive much-needed bullish sentiment, particularly with the presence of favorable technical chart patterns.