What To Expect as Markets Price In No Rate Cut

Today, market focus is on the FOMC meeting as the latest rate decision will be announced. The Federal Reserve announces policy at 2:00 p.m. ET, followed by Chair Jerome Powell at 2:30 p.m. ET. Markets expect no rate change, with pricing showing near certainty, despite active debate among policymakers.

FOMC Meeting Outlook and Market Expectations

The FOMC meeting comes after weeks of firm economic data and mixed inflation signals. Futures markets show a 97% probability that rates remain unchanged today. As CoinGape reported, the odds of a rate cut are at 1%, according to Polymarket data, as crypto traders expect interest rates to remain unchanged.   

Former Federal Reserve Vice Chairman Roger Ferguson, in a CNBC interview, noted that durable goods orders remain steady and that unemployment remains relatively low. However, inflation continues above the Fed’s 2% target, supporting patience for now.

According to Ferguson, these conditions allow policymakers to wait for clearer inflation trends. He highlighted Powell’s press conference as one to closely watch for tone and emphasis. He predicted that markets focus on language rather than immediate policy changes.

Powell, Dissents, and Policy Messaging

In an X post, macro expert Brent noted that no policy change appears likely. He stated that questions may focus on the Fed’s balance sheet runoff and Treasury bill purchases. Brent also flagged potential questions about yen volatility and President Trump’s prior remarks. 

Historically, the Fed has avoided foreign-exchange commentary, limiting direct responses. Meanwhile, possible dissent votes may be highly scrutinized by the market during today’s FOMC meeting. Brent suggested dissenters could include Federal Reserve Board member Stephen Miran and possibly Christopher Waller. Brent noted that Fed Governor Michelle Bowman appears less likely, based on recent alignment with committee consensus.

Meanwhile, speculation surrounds Powell’s future after his term as Fed chair ends in May. The expert highlighted this as another development market participants should monitor today, as the Fed chair could address it during his press conference. Brent noted Janet Yellen signaled her exit months before leaving the chair role. However, no confirmation or guidance has emerged from the Fed.

Bitcoin’s Volatility In Focus

The FOMC meeting often brings notable Bitcoin moves. Crypto analyst Ali Martinez noted that the Bitcoin price declined following seven out of eight meetings last year. The May FOMC meeting was the only time that BTC saw an upward trend following the Fed decision. 

Analyst Mister Crypto noted a recent pattern of pre-FOMC drops followed by rebounds. This time, Bitcoin declined ahead of the FOMC meeting, altering short-term expectations. Still, historical volatility keeps risk high in announcement periods.

Notably, Bitcoin had climbed above $90,000 earlier in the day ahead of today’s FOMC meeting. The flagship crypto is trading just below this psychological level at press time. In addition to the Fed meeting, Tesla, Microsoft, and META report earnings today, which could impact BTC and the broader crypto market.