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The global markets have their eyes set on the U.S. Federal Reserve as it announces the interest rate hike at the FOMC meeting today. The strong U.S. Dollar and recent Fed hawkish rate hikes have stretched the bear market and put immense pressure on the global stocks and crypto markets.
Wall Street experts believe the Fed probably go with another 75 bps rate hike, but that’s not crucial now. In fact, Fed Chair Jerome Powell’s speech is more crucial under present conditions as recession fears mount gradually.
U.S. Federal Reserve’s 50 or 75 Bps Rate Hike Scenarios
According to the CME FedWatch Tool, the probability of a 75 bps rate hike is 90.2% and the probability of a 50 bps rate hike is just 9.8%. It indicates the Fed will likely go with another 75 bps rate hike to tackle inflation.
Popular crypto analyst Michael van de Poppe asserts that a 75 bps rate hike is not the crucial point that will drive markets in the upcoming weeks. In fact, Federal Reserve Chair Jerome Powell’s speech highlighting his hawkish or dovish future outlook will influence price action in the crypto market.
According to investment bank JPMorgan, a 50 bps rate hike by the Fed may spark a 10% rally in the U.S. stock market. Meanwhile, Goldman Sachs expects a 75 bps rate in November and a 50 bps rate hike in December. Moreover, the Fed will continue to raise interest rates in 2023, but with a dovish outlook.
Meanwhile, the crypto market remains volatile ahead of the Fed rate hike decision. The U.S. Dollar Index (DXY) continues to move higher in the last few days, but shows volatility today. The DXY index is at 111.30.
Last week, the European Central Bank also raised interest rates by another 75 bps. Moreover, the U.S. Q3 GDP comes in higher at 2.6% against the expected 2.4%. It is the highest GDP growth since Q4 2021 and after recording negative GDP growth in the last two quarters.
Crypto Analysts Remain Bullish
Crypto analysts Michael van de Poppe, Will Clemente, Scott Melker, and others remain bullish on Bitcoin and top altcoins. However, the BTC price may dive below $20k to start a rally from the bottom toward $22.4K after the Federal Reserve’s rate hike.
Bitcoin price rallied over $20k and continues to hold above the psychological level. Moreover, an increase in shorts liquidation indicates the bear market may be ending soon. The BTC and Ethereum (ETH) prices are trading at $20,400 and $1,552, respectively.
Other altcoins including XRP, DOGE, SHIB, Cardano (ADA), and BNB showed upside price momentum amid whale accumulation.
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