Omkar Godbole is a Co-Managing Editor on CoinDesk's Markets team.
traders, Thursday's Federal Reserve rate decision will primarily focus on the central bank's commentary, especially concerning the anticipated inflationary effects of President-elect Donald Trump's promised policies, rather than the decision itself, which seems to be priced in.In September, the Fed delivered an outsized 50 basis points rate cut, kicking off the so-called liquidity easing cycle in a positive development for risk assets, including cryptocurrencies.
The current target range of 4.75% to 5% for the Fed funds rate is well above the"neutral" level, estimated between 3%-3.5%. The consensus, therefore, is that the Fed has plenty of room to normalize the overly tight monetary policy with rate cuts, more so since the labor market cooled significantly in October.The CME's FedWatch tool shows traders assigning a nearly 100% chance of the Fed reducing the benchmark interest rate range to the 4.5%-4.7% range Thursday.
During the post-rate decision press conference, Powell is likely to field questions about the election and possible inflation resurgence under Trump.
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