The Federal Reserve is expected to announce a cut in interest rates during the Federal Open Market Committee meeting. This decision has implications for the crypto market as digital assets have been sensitive to Fed policy. Low interest rates have benefited cryptocurrencies in the past as they are considered "risk-on" assets. The correlation between Bitcoin and the S&P 500 has reached levels not seen since 2022, indicating that macroeconomic developments have a significant impact on BTC. A rate cut could increase liquidity in the financial system and boost risk-on assets like Bitcoin. The size of the rate cut is also important, with a 50-basis point reduction potentially providing an unexpected boost to risk assets. Additionally, Senator Elizabeth Warren has advocated for a 75-basis point cut to avoid a recession. Traders and analysts are closely watching the meeting for insights into the longer-term rate outlook and the committee's view on the labor market. Overall, all eyes are on Federal Reserve Chair Jerome Powell for the decision's potential impact on the crypto market.



Other News from Today