While volatility has been effective in the Bitcoin (BTC) and cryptocurrency markets in recent days, today all eyes are on the FED’s January interest rate decision.
As is known, the FED made its first interest rate cut in September and made an aggressive start to the discount cycle with a 50 basis point cut decision. The FED also made a 25 basis point rate cut in November and December.
After these interest rate cuts, dollar, gold, stock market and cryptocurrency investors closely follow the January decision, which is the first interest rate decision of 2025, while the questions of whether the FED will continue to cut interest rates and how much of a cut it will make continue to be important for investors.
When Will the January FED Interest Rate Decision Be Announced?
The FED will announce its January interest rate decision on January 29, 2025 at 22:00 Turkish time.
Following the decision, FED Chairman Jerome Powell will make oral statements at 22:30.
In Which Direction Are Expectations Focused?
The general expectation for the FED interest rate decision, which is eagerly awaited by global markets, is that the FED will leave the policy rate unchanged in January. According to FED Watch, the probability of interest rates remaining unchanged in January is priced in at 99.5%.
At this point, it is almost certain that the FED will keep interest rates constant this month, but it is estimated that it will reduce rates by 25 basis points in June.
Analysts stated that the FED is expected to cut interest rates three times this year, and that the policy text and Powell’s verbal guidance are expected to provide clues about future monetary policy.
Analysts also added that despite recent statements from FED officials indicating that the fight against inflation will continue for a long time, expectations in the markets for an interest rate cut during the year are gaining strength.
LHMeyer analysts argued that while the labor market appears to be stabilizing, that doesn’t mean the Fed’s monetary policy stance isn’t having a negative impact on the economy.
“We expect the policy rate to remain above 4% by mid-2025 and to be more clearly restrictive. We also expect tariffs to put upward pressure on prices, contributing to 2.5% inflation in 2025, but with a mild enough impact that it will not prevent the Fed from cutting rates,” the analysts said.
Markets are likely to react moderately positively to the Fed’s interest rate decision, said François Rimeu, senior market strategist at Crédit Mutuel Asset Management.
“The focus of markets this week will likely remain on developments from the Trump administration, overshadowing the upcoming Federal Reserve and European Central Bank meetings where no major surprises are expected,” said Danske Bank analyst Kirstine Kundby-Nielsen.
*This is not investment advice.
