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A recent comment from a Federal Reserve official has sparked speculation across financial markets, particularly in the cryptocurrency sector.
St. Louis Fed President Alberto Musalem's recent remarks indicate that the central bank may hold off on cutting interest rates in the near term, citing concerns over inflation. According to the WSJ, the Fed official had indicated that further rate cuts could wait.
Musalem stated that by December's meeting, the chances of inflation remaining between 2.5% and 3% had increased. As a result, he believes that greater caution might be warranted in making further reductions.
Musalem had previously indicated that he supported the Fed's decision to start reducing rates with a bolder half-point decrease in September. Going forward, rate cuts "have to be gradual—and more gradual than I thought in September," he stated.
Tomiwabold OlajideFed officials have broadly signaled they are inclined to hold rates steady at their next meeting, scheduled for Jan. 28 and 29. The Fed meeting minutes from December, released on Wednesday, revealed that officials were concerned about inflation and signaled that they would move more cautiously on interest rate decreases in 2025.
Ahead of the Fed meeting in late January, crypto investors are closely watching for potential impacts on Bitcoin, Ethereum and other digital assets.
Crypto market braces for impact
The cryptocurrency market regained some stability in the early Friday session, with BTC rising to highs of $95,283. Late Wednesday, prices tested the long-standing support zone of $90,000-$93000, which has successfully stopped negative momentum at least six times since the second half of November.
Cardano's ADA led a recovery among the top 10 cryptocurrencies, rising 5% in the last 24 hours. Solana's SOL, BNB Chain's BNB and Ethereum (ETH) all gained by up to 1%. Shiba Inu and Stellar (XLM) climbed more than 3%, while SUI surged up to 8%.
Investors are anticipating the release of December’s nonfarm payrolls reading, due today. The report is an important indicator of the health of the economy and will be one of the final key pieces of data released before the Federal Reserve's meeting at the end of January. The outcome of the report has the potential to impact the Fed's interest rate policy.
Disclaimer: The opinions expressed by our writers are their own and do not represent the views of U.Today. The financial and market information provided on U.Today is intended for informational purposes only. U.Today is not liable for any financial losses incurred while trading cryptocurrencies. Conduct your own research by contacting financial experts before making any investment decisions. We believe that all content is accurate as of the date of publication, but certain offers mentioned may no longer be available.
Yuri Molchan
Dan Burgin
Vladislav Sopov