Bitcoin (BTC) Price Stumbles Below $65,000 as Fed Holds Interest Rates, Indicates Possible September Cut
The Bitcoin (BTC) price has stumbled below $65,000 in wake of the latest Fed policy decision, where the central bank held interest rates steady at 5.25-5.50% as expected, and Fed chair Jerome Powell indicated a potential rate cut coming as soon as September.
⚠️BREAKING:
*FED CHAIR POWELL: RATE CUT COULD BE ON THE TABLE AT THE SEPTEMBER MEETING
*POWELL: 'IT'S JUST A QUESTION OF SEEING MORE GOOD DATA'$SPY pic.twitter.com/l52T5diaA2
— Investing.com (@Investingcom) July 31, 2024
That a more than 2% drop on the day for Bitcoin, whose market cap was last around $1.276 trillion.
The tone of the Fed and Powell’s remarks suggested that a September rate cut isn’t a done deal yet. Rather, the data will need to continue to point in that direction (i.e. more inflation and labor market softening).
That perhaps left some market participants who had been looking for a more concrete indication that rate cuts are coming somewhat disappointed.
That could explain the downside in the Bitcoin price. That said, the reaction in traditional financial markets was dovish, suggesting growing confidence that rate cuts are coming.
As per CME data, money markets continue to imply a 100% chance of the Fed cutting interest rates by at least 25 bps.
Moreover, CME data shows the implied likelihood of a 50bps rate cut in September to 18.2% from 13.2% prior to the meeting.
US 2- and 10-year yields both hit their lowest levels since March, the former dipping under 4.30%, the latter approaching 4.0%.
The big-tech stock packed Nasdaq 100 index pumped an impressive more than 3.5%, meanwhile.
US yields have been in a downtrend since April. The Nasdaq 100, meanwhile, while correction-prone, has been trending higher all year.
With Fed rate cuts seemingly now right around the
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