On Wednesday, September 21 at 8 p.m. Dutch time, the Federal Reserve will announce the new US interest rate. The Federal Reserve’s interest rate decision promises to be an important moment for financial markets. After the disappointing inflation figures, the Federal Reserve is expected to intervene again harshly.
Harsh intervention expected
Before the announcement on September 13 that US inflation was 8.3 percent higher than expected, expectations for the Federal Reserve’s upcoming interest rate decision also skyrocketed. Where there was initially a chance of an interest rate increase of 0.5 percent, that is now off the table. we need it minimal with a 0.75 percent rate hike, but there is a chance the Federal Reserve will hurt the market with a 1 percent hike.
Fortunately for us, the 0.75 percent rate hike has an 85 percent chance, and the market says there is only a 15 percent chance of a 1 percent hike. With the current interest rate of 2.25 to 2.5 percent, with this increase we will go to at least 3 to 3.25 percent. As a result, interest rates have risen at a fairly rapid pace from zero to 3 percent.
What does this mean for Bitcoin?
The expectation that the Federal Reserve will raise interest rates by 0.75 percent is now pretty ingrained. Still, the market gives a 1 percent increase a 15 percent chance. If the Federal Reserve does indeed come up with an increase of 0.75 percent, there is a chance that the price will make a small jump. However, that jump will be quite modest, because apart from the fact that there will be no interest rate hike of 1 percent, there is little to celebrate at that time.
However, if the Federal Reserve decides to raise interest rates by 1 percent, there’s a good chance we’ll start another nosedive. A nosedive that could take us well below $20,000 and perhaps a new local low for this bear market.
