The US stock market reacted little to the open ahead of the Federal Open Market Committee (FOMC)’s crucial decision on interest rates, while Bitcoin’s price continues to rise. The decision is becoming all the more important now that it comes amid the banking crisis. A majority of investors believe the Fed panel would go for a 25 basis point hike, while few think there will be no hike. Meanwhile, the crypto market is largely following a sideways pattern ahead of the decision.

Read also: 25 fps, 50 fps or 0; What can you expect from the FOMC meeting? How will the crypto market react?

According to the CME FedWatch Tool, about 85% of respondents think the central bank will go for a rate hike of 25 basis points. In fact, the probability of the target interest rate for the upcoming Fed meeting fluctuated, with a significant portion of investors believing there would be no hike as market dynamics changed with the banking crisis over the past two weeks.

US stocks open flat

The stock market opened flat on Wednesday as traders anticipated the Fed’s decision amid weakened sentiment surrounding the banking sector. The Dow Jones Industrial Average, S&P 500 Index and Nasdaq Composite Index are currently down 0.09%, 0.09% and 0.15% respectively. Meanwhile, Bitcoin price is moving closer to its recent high of $28,600, the highest level it reached since June 2022. A 25 basis point increase would mean the Fed is sticking to its stance of tightening in its drive to bring inflation back up to 2% target.

Investors, however, will look for signs of easing and a path to a Fed pivot amid the ongoing banking crisis that has led to massive losses in value in the banking sector. Traders will be waiting for Fed Chairman Jerome Powell’s press conference, scheduled just after the interest rate decision is announced.

Also Read: Buy Bitcoin, End the Fed, Says Ex-Coinbase CTO Ahead of FOMC

Anvesh reports major developments around crypto adoption and trading opportunities. He has been associated with the industry since 2016 and is now a strong advocate for decentralized technologies. Anvesh is currently based in India. Contact him at [email protected]

The content presented may contain the personal opinion of the author and is subject to market conditions. Do your market research before investing in cryptocurrencies. The author or publication is not responsible for your personal financial loss.

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