PANews reported on December 16 that according to The Block, according to the forecast of the CME FedWatch tool, the probability of a 25 basis point rate cut at the Federal Open Market Committee (FOMC) meeting on December 18 is 97%. Although lower interest rates generally encourage investors to allocate capital to risky assets such as Bitcoin, analysts warn that the Fed's comments at the FOMC meeting on Wednesday may reduce market expectations for further rate cuts. The central bank will also release updated economic forecasts and dot plots to provide policymakers with new insights into the outlook for 2025.
Despite expectations of rate cuts, heightened inflation concerns complicate the outlook. Recent U.S. CPI and PPI data have raised concerns about potential price pressures next year, especially given speculation about the economic policies of U.S. President-elect Donald Trump, who will take office in January 2025. Trump's proposed policies - including tariffs, immigration controls and personal and corporate tax cuts - could push up inflation.
ING Bank analysts said these developments could lead to slower and more cautious rate cuts in 2025. ING analysts said: "President-elect Trump's policy advocacy of immigration control, tariffs, and personal and corporate tax cuts may mean that the Federal Reserve will send signals that it will take a flatter and slower path of rate cuts in 2025." However, while macroeconomic events are still influential, QCP Capital analysts believe that Bitcoin's recent rise is mainly driven by market sentiment.
