Fed, BoE, BoJ Rate Decisions Pending: Crypto Market Impact

This week, the global crypto market is preparing for higher volatility as major financial institutions, including the Federal Reserve , the Bank of England, and the Bank of Japan, get ready to announce their interest rate decisions. With the US Fed leading the way, these important announcements will affect nearly 40% of the global economy, creating waves across Wall Street and beyond.

Fed, BoE, and BoJ Interest Rate Decisions Pending This Week

Significantly, all are watching the potential interest rate decisions from the US Federal Reserve, the Bank of England, and the Bank of Japan. The Fed will announce its policy decision on September 17. The BoE will follow on September 18, and the BoJ will make its announcement on September 19.

Notably, the US central bank is widely anticipated to reveal a loosened monetary policy, with the rate cut odds at 100%. The debate now centers on the size of the decision, with both 25 and 50 basis point options still on the table. However, the CME FedWatch tool suggests that the 25-basis-point reduction is more likely. Bloomberg Economics noted,

"We expect the FOMC to cut rates by 25 basis points. That won’t be because economic data on both sides of Fed’s mandate – price stability and full employment – warrant it. Rather, the markets expect a rate cut, the White House wants it — and we think Powell is doing what he sees as needed to fend off further threats to the Fed’s independence."

Meanwhile, the BoE and BoJ are expected to hold their rates unchanged due to persistent inflationary pressures. As per economists' predictions, England is slated to loosen its monetary policy this year, likely at its November meeting. In contrast, Japan may tighten its policy, with experts predicting that the country will raise rates in Q4, with October or December being the likely months.

How Will These Events Impact the Crypto Market?

Interestingly, these upcoming events are expected to influence the global crypto market in a broader range. As the US is predicted to reduce interest rates, it is expected to have a positive impact on the crypto market , with assets like Bitcoin benefiting the most, as lower interest rates increase liquidity and make riskier assets more attractive.

At the same time, England and Japan’s possible move to maintain their previous interests sparks questions. These divergent monetary policies could lead to increased volatility in the crypto market.