![Federal Reserve: Crypto Reacts to Fed's Crucial Market Comments](https://u.today/sites/default/files/styles/736x/public/2024-07/50490.jpg)
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This week, Fed officials delivered crucial comments with significant ramifications for the crypto market.
In a statement on Wednesday, Federal Reserve Governor Christopher Waller, in a program at the Kansas City Fed suggested that interest rate cuts might be on the way, as long as there are no major surprises in inflation and employment.
While Waller thinks rate cuts might be near, he highlighted that he will closely monitor the data in the meantime.
Waller’s sentiments suggest the unlikelihood of a rate cut when the Federal Open Market Committee meets later this month, but a higher likelihood of one in September.
Waller outlined three potential scenarios for the coming days: one in which inflation data becomes even more positive, justifying a rate cut in "the not too distant future"; a second in which the data fluctuates but still points to moderation; and a third in which inflation rises and forces the Fed to tighten policy. He views the third option, of unexpectedly increased inflation, to be the least plausible.
Earlier this week, Federal Reserve Chair Jerome Powell stated that interest rates might be cut before inflation reached 2%.
Crypto market reacts
The cryptocurrency market is posting a mixed reaction, with several cryptocurrencies posting losses at press time.
A rate cut in July is currently considered highly unlikely, but traders are increasingly banking on the Federal Reserve cutting interest rates in September. There is presently less than a 5% likelihood that the Fed's target range for the federal funds rate, its key rate, will be reduced in July; but, the odds of a September cut are currently greater than 90%.
At the time of writing, Bitcoin was slightly down 0.64% in the last 24 hours, with several other cryptocurrencies posting losses between 2% and 11%. Shiba Inu and WRX token sustained significant losses of more than 9% following the WazirX hack incident.
Meanwhile, a few cryptocurrencies were trading in the green, with Dogwifhat (WIF) up 12% in the last 24 hours and Thorchain (RUNE) up 7% in the same period.