Regulation

Will Federal Reserve Interest Rate Remain Unchanged This Year?

Published

1 day ago

January 29, 2025

The second day of the January US FOMC meeting is underway today, after which the Federal Reserve will announce its interest rate decision. This will be the first Federal Reserve interest rate announcement since Donald Trump took office and is significant, especially considering the impact it has on the crypto market.

US FOMC Meeting Today: Will The Fed Announce An Interest Rate Cut

All eyes are on the US FOMC meeting today as the Fed will announce its interest rate cut decision following its 2-day meeting, which began yesterday. CME FedWatch data shows that there is a 99.5% probability of the Federal Reserve keeping rates unchanged at the current rate of 4.25% to 4.5%.

Since the December FOMC meeting, traders have been betting on the likelihood of the Fed keeping rates unchanged at this January meeting despite the fact that the US Central Bank announced a 25 basis point cut at that meeting, which marked the third consecutive cut in 2024.

This sentiment from traders came following Jerome Powell’s speech, in which he suggested that the Fed was hawkish despite the interest rate cut. Since then, macro data have also strengthened the case for rates remaining unchanged.

CoinGape recently reported that the December US CPI report showed that inflation jumped to 2.9%, as expected. Although in line with expectations, this highlighted the inflationary pressure in the country, a development that could make the Central Bank skeptical about cutting rates.

The US PPI data provided some optimism as it showed the inflation rate at 3.3%, lower than expected. However, it is worth mentioning the strong US job data that came in at the start of the year, which suggested that there was no need for the Fed to cut rates over concerns in the labor market.