Bitcoin (BTC) Price Holds Steady Ahead of Fed Rate Decision; Macro Tailwinds Remain Intact

The Fed is widely expected to lower its benchmark interest rate by 25 basis points, bringing it to a range of 4.25%-4.5%, marking a cumulative 100 bps cut

The Federal Reserve is set to announce its latest interest rate decision on Wednesday, with markets largely expecting a 25 basis point cut.

This would bring the central bank’s benchmark rate to a range of 4.25%-4.5%, marking a cumulative 100 bps reduction since September.

While a rate cut is generally considered bullish for risk assets like Bitcoin, traders are keeping a close eye on the Fed's forward guidance, which may signal a slowdown in rate cuts next year.

This could temper expectations for an aggressive easing cycle and might lead to a rally in Treasury yields and the U.S. dollar.

The Fed's decision and Chair Jerome Powell's press conference are scheduled for 2:00 p.m. ET on Dec. 18.

The central bank's rate projections, known as the "dot plot," will also be unveiled at this time.

The Fed is widely expected to lower its benchmark interest rate by 25 basis points on Wednesday, bringing it to a range of 4.25%-4.5%.

This would mark a cumulative 100 bps cut since September, in a bid to tame inflation and bolster the U.S. economy.

The decision, set to be announced at 2:00 p.m. ET, will be followed by a press conference with Chair Jerome Powell.

Traders will be parsing the central bank’s statement, Powell's remarks and the latest "dot plot" of rate projections for clues on the Fed's future path.

While a rate cut is generally considered bullish for risk assets like Bitcoin, traders are keeping a close eye on the Fed's forward guidance, which may signal a slowdown in rate cuts next year.

This could temper expectations for an aggressive easing cycle and might lead to a rally in Treasury yields and the U.S. dollar.

Rising yields present an alternative to speculative bets, which may pose a short-term challenge for Bitcoin and other risk assets.

However, on a broader scale, BTC's sustained gains in recent weeks are largely attributed to the Fed's easing stance and an overall shift in risk appetite.

This bodes well for the crypto king in the long run, despite any short-term hiccups.