Fed Meeting Minutes Indicate Gradual Interest Rate Cuts

Fed's Gradual Approach to Interest Rate Cuts

The Federal Reserve's November meeting minutes highlight officials' confidence in decreasing inflation, suggesting future interest rate cuts will be gradual. The minutes, linked to the recent policy meeting, revealed a quarter-point cut to 4.50%–4.75% in the benchmark lending rate. Officials anticipated that if inflation trends sustainably towards 2% and the economy maintains near maximum employment, a gradual shift to a neutral policy stance would be appropriate.

Cryptocurrency Market Reaction

Following the release of the Fed's minutes, the cryptocurrency market responded positively. Early Wednesday trading saw Bitcoin rise to $93,000, recovering from a previous dip. Other crypto assets also experienced gains, with XRP increasing by 6%, while Cardano and Stellar rose by 10%. Aave, Algorand, and Zcash saw significant increases of 13% and 23%, respectively.

Upcoming Economic Data and Market Expectations

The minutes were released ahead of key inflation data, specifically the October personal consumption expenditures (PCE) price index, the Fed's preferred inflation measure. This index plays a crucial role in shaping monetary policy decisions. Traders are bracing for a series of economic data on Wednesday, preceding the Thanksgiving holiday closure. There is a 66% expectation that the Fed will lower rates by a quarter point at the December meeting, with a 33% chance of rates remaining unchanged.