Fed Holds Rates Steady, Signals Three Rate Cuts in 2024: Bitcoin Surges Past $43K, Ethereum Climbs to $2280, and Dow Jones Hits Record High
Federal Reserve’s Decision Fuels Market Optimism
In a move that aligned with market expectations, the United States Federal Reserve (Fed) maintained the federal funds rate between 5.25% and 5.50% in its FOMC statement released on December 14. This decision follows two consecutive pauses in rate hikes in September and November. Moreover, Fed Chair Jerome Powell’s hint at a potential rate cut has sparked excitement among investors.
Further reading：BlackRock’s Revision of Bitcoin Spot ETF Mechanism: Opening Doors for Wall Street Banks to Enter Crypto
Officials Forecast Three Rate Cuts in 2024
While the Fed’s ultimate goal remains achieving a 2% inflation rate, recent economic data indicates a slowdown in growth compared to the third quarter, with strong employment and low unemployment rates. Thus, in deciding to hold the rate steady, Fed officials have also begun discussing the timing of rate cuts.
If you want to trade BTC immediately, click here!!!
Chair Powell stated:
“This will be a theme we explore in the future. Fed officials predict three rate cuts of 25 basis points next year, which will drive significant market gains.”
According to the dot plot, Fed officials also expect four more rate cuts in 2025. They believe that it will no longer be necessary to combat CPI pressure by raising rates, as inflation is expected to slow to 2.8% by the end of this year and to 2.4% by the end of 2024.
Bitcoin Breaks Through $43,000
Motivated by the Fed’s announcement to hold off on rate hikes and consider rate cuts next year, Bitcoin soared to a high of $43,429 on December 14.
If you want to trade BTC immediately, click here!!!
Similarly, Ethereum showed an upward trend, reaching as high as $2,282.
Further reading：Bitcoin Spot ETF Update: Intensive Talks with BlackRock and Others Raise Hopes for SEC Approval by January 10
U.S. Stock Indices Rally
The U.S. stock market also performed impressively, with all four major indices rising and the Dow Jones setting a new historical high:
- Dow Jones Industrial Average: Up 512.3 points (1.4%), closing at 37,090.24 points.
- NASDAQ: Up 200.57 points (1.38%), closing at 14,733.96 points.
- S&P 500: Up 63.39 points (1.37%), closing at 4,707.09 points.
- Philadelphia Semiconductor Index: Up 60.77 points (1.55%), closing at 3,990.95 points.
U.S. 10-Year Treasury Yield Falls Below 4%
Additionally, the yield on the U.S. 10-year Treasury note has shown a significant drop, falling below 4% at the time of writing.
Jeffrey Gundlach, founder of DoubleLine Capital and dubbed the ‘new bond king,’ predicts that the yield on the U.S. 10-year Treasury will drop closer to 3% next year.
Click here to register with DigiFinex and enjoy cryptocurrency trading.
Keywords: Federal Reserve, Interest Rate, Bitcoin, Ethereum, U.S. Stock Market, Dow Jones, NASDAQ, S&P 500, Philadelphia Semiconductor Index, Jerome Powell, Economic Growth, Inflation, Treasury Yield, Jeffrey Gundlach, Rate Cuts, FOMC Statement, Financial Markets
