The Federal Reserve’s upcoming FOMC meeting on June 18 is setting the tone for financial markets, especially crypto. With recent economic data showing strong job growth and stubborn inflation, the odds of a rate cut are close to zero—and traders are adjusting their expectations accordingly.
No Rate Cuts Expected in June
For much of 2024, market sentiment pointed toward rate cuts in the summer. However, robust employment numbers and persistent inflation have shifted the outlook. According to the CME FedWatch Tool, there is now a 99.9% chance that the Fed will hold rates steady, and only a 0.1% chance of a 25 basis point cut this month.
In July, the probability of a rate cut is still low—just 14.5%.
This sharp drop from expectations in May reflects how significantly investor sentiment has changed in recent weeks.
Trump and ECB Push for Cuts—Fed Stays Cautious
Pressure is mounting on the Fed to ease rates. The European Central Bank recently cut its benchmark rate by 25 basis points, and Donald Trump has publicly called for an aggressive 100 bps rate cut, labeling it as “rocket fuel” for the U.S. economy.
Trump has also criticized Fed Chair Jerome Powell, suggesting he could be replaced by Kevin Warsh if monetary policy doesn’t loosen soon. Despite this, the Fed appears firm in its stance, signaling that tariffs and inflation trends will heavily influence any future moves.
Bitcoin Holds Above $108K Amid Caution
The crypto market is showing resilience, with Bitcoin trading above $108,000, marking a 2% gain in 24 hours. The total crypto market cap remains strong at $3.38 trillion, supported by investors rotating out of the U.S. dollar into risk-on assets.
According to analysts, this behavior is propping up Bitcoin. However, not all technical indicators are bullish. A potential Head and Shoulders pattern on Bitcoin’s chart could lead to a correction, possibly pulling the price down to around $92,000 if confirmed.
Outlook: Optimism Meets Uncertainty
As the FOMC decision nears, the crypto market stands at a crossroads. If inflation data surprises or the Fed changes its tone, volatility could spike. For now, no rate cut in June seems almost certain—leaving the crypto community waiting for signs of change in July or beyond.