FED: A Decrease In Interest Rates Could Change Everything In December!

Recent employment data in the United States suggests a likely interest rate cut in December, according to Grayscale. This outlook could influence financial markets, particularly bitcoin, which could benefit from this more accommodative monetary policy. Here’s what the numbers reveal.

FED: A new interest rate cut on the horizon?

According to Grayscale, recent employment data in the United States indicates a probable interest rate cut in December. In November, 227,000 new jobs were created, surpassing expectations of 220,000. However, the unemployment rate slightly increased to 4.2%, which could encourage the Federal Reserve to lower interest rates at its next meeting.

The CME FedWatch, a forecasting tool, recently indicated a 74.5% probability that the FED will cut interest rates by 0.25% at its meeting on December 17 and 18. This forecast has been bolstered by comments from Federal Reserve Governor Christopher Waller, who expressed support for a rate cut in December. Waller stated that monetary policy remains restrictive and that he expects rate cuts to continue into next year until reaching a more neutral level.

Bitcoin, the big winner?

In general, lower interest rates tend to weaken the dollar’s value and benefit other currencies, including bitcoin. Despite a recent drop in BTC, Grayscale predicts that the crypto rally could continue into the new year.

Jamie Coutts, a crypto analyst at Real Vision, recently predicted that the FED would increase the M2 money supply by about $20 trillion by 2025. According to him, this increase in liquidity could attract $2 trillion in capital into the bitcoin markets.

In summary, the employment data in the United States and the forecasts of interest rate cuts by the FED could have a significant impact on financial markets, especially on bitcoin. The meetings on December 17 and 18 are highly anticipated by investors.