Federal Reserve Policy and Market Impact
Federal Reserve Chairman Jerome Powell announced in a press conference that rate cuts in September and October were for risk management, leaving future policy actions uncertain.
This uncertainty lowered the probability of a December rate cut, impacting risk assets globally and strengthening U.S. Treasury yields and the dollar index.
Market Reassessment and Risk Asset Declines
At a press conference, Federal Reserve Chairman Jerome Powell described the rate cuts in September and October as risk management-style and highlighted December plans remain undecided. Differing views within the committee led to market reassessment.
The rapid drop in market-implied probabilities for a December rate cut resulted in declines in major risk assets.
The market's adjustment in expectations caused a decline in risk assets, including cryptocurrencies, while U.S. Treasury yields rose, and the dollar index appreciated. BTC and ETH are affected due to perceived policy ambiguity.
Following Powell's statement, market participants began reevaluating risk, leading to declining prices in major cryptocurrencies. BTC and ETH experienced sell-offs as investors recalibrated strategies.
Crypto Market Volatility Amid Fed Policy Signals
The Federal Reserve's decisions can significantly influence global financial markets, impacting everything from stocks to cryptocurrencies.
Bitcoin's market currently stands at $111,071.16 with a market cap of 2.21 trillion. Over 24 hours, its trading volume reached 68.20 billion, down 3.43%, while the seven-day change shows a 2.77% rise. Despite fluctuations, BTC's dominance remains at 58.88%.
Research suggests potential impacts of Fed policy on crypto sectors might lead to prolonged volatility. Historical data shows transitory trends with regulatory decisions affecting market behavior.