What Are the Odds of a Another Fed Rate Cut This Month?

The market is closely watching the U.S. Federal Reserve, with many speculating on a potential rate cut in the near future.

This anticipation comes amid ongoing concerns over high inflation, which could force the Fed to make a decision that would ripple through both traditional and digital markets.

Polymarket, a popular prediction market, has priced in a 25 basis point cut, signaling strong expectations for the Fed’s next move. Analysts are increasingly speculating that such a cut could reignite interest in riskier assets, especially Bitcoin, which has been struggling to break through its previous all-time highs. Some experts, like Crypto Rand, believe that this monetary shift could push Bitcoin well beyond $103,900, setting the stage for a new rally.

Polymarket is pricing in a 25 BPS rate cut in the US 🇺🇸 next week.

The timing coincides with many getting their Xmas bonuses!

Do you think its priced in or could we see the #crypto markets react with another push? 🤔 pic.twitter.com/SGb8weILia

— Crypto Rand (@crypto_rand) December 12, 2024

Historically, when interest rates drop, the appeal of traditional investments like bonds diminishes, prompting investors to look for better returns elsewhere. This shift in sentiment often benefits assets like Bitcoin, which offers higher risk but greater potential for reward. With U.S. inflation remaining sticky, many are predicting the possibility of another rate cut later this year, especially after inflation showed minimal improvement in November.

Jerome Powell, the Federal Reserve Chair, has repeatedly mentioned that the central bank must tread carefully when adjusting interest rates. The goal is to avoid stifling economic growth while trying to bring inflation down to more manageable levels. Powell remains confident in the Fed’s ability to navigate these complex challenges.