The likelihood of a U.S. Federal Reserve rate cut in December is now in question, following remarks from Chairman Jerome Powell that dampened expectations.
While the cryptocurrency markets had been riding high after the election of Donald Trump, they experienced a slight dip late on Thursday following Powell’s speech. The Fed Chair indicated that the economy wasn’t showing signs of needing an immediate rate cut, saying, “The strength we are currently seeing in the economy gives us the ability to approach our decisions carefully.”
Bitcoin (BTC) dropped about 1.5% to $88,300 following Powell’s comments and continued to slide, reaching $88,000, a 3.2% decline over the past 24 hours. Ether (ETH) experienced a similar pullback. Despite this, the broader CoinDesk 20 Index saw a modest gain of 0.5%, driven by Ripple’s (XRP) 13% surge, which may have been bolstered by comments from SEC Chair Gary Gensler, which some interpret as signaling his possible exit from office after Trump’s win.
The chance of a rate cut in December, which had seemed almost certain, now stands at 62% according to CME FedWatch, down from 83% just one day earlier.
Traditional markets also pulled back slightly in reaction to Powell’s hawkish tone, with the Nasdaq falling 0.75% to a session low just before the close.
Despite this brief retreat, the crypto market has been experiencing strong gains, with Bitcoin still up 15% over the past week. Other major cryptocurrencies, such as Cardano (ADA), Ripple (XRP), NEAR, and Stellar (XLM), have seen impressive week-over-week growth, with gains ranging from 20% to 40%.
