- The FOMC will conclude its two-day meeting on Wednesday.
- Economists expect the bank will leave rates unchanged between 5.25% and 5.50%.
- Bitcoin and altcoins like HBAR, CFX, and INJ prices have a bullish outlook.
Bitcoin price staged a strong comeback last week as the recent outflows from the Grayscale Bitcoin ETF (GBTC) eased. The jump accelerated after the US published an encouraging Personal Consumption Expenditure (PCE) report on Friday. Bitcoin jumped from $38,500 to over $42,000.
This jump also triggered the performance of other cryptocurrencies. Conflux price surged to a high of $0.2500, its highest point since June 24th. The CFX token has jumped by more than 142% from its lowest point in October last year.
Injective (INJ), one of the best-performing altcoins in the market, has risen in the past four straight months and is trading at its highest point since January 18th. Hedera Hashgraph (HBAR), Avalanche, and Solana prices have also surged recently.
The Federal Reserve decision will be the key catalyst for crypto and other assets this week. Historically, the FOMC decision tends to have an impact on these assets because of the pivotal role that interest rates have on the economy.
For example, Bitcoin and other cryptocurrency prices jumped sharply after the last Fed decision. In it, the officials hinted that they would deliver at least three interest rate cuts this year.
The upcoming decision, however, will likely have no major impact on Hedera, Conflux, Injective, and other cryptocurrencies. For one, most analysts already expect the Fed will leave rates unchanged between 5.25% and 5.50%.
Further, there are signs that the committee will still commit to three cuts this year. What has changed recently is that most analysts believe that these cuts will not start until June this year.
That’s because recent economic numbers have been hotter than expected. For example, the US GDP expanded by 3.3% in Q4 after growing by 4.9% in the previous quarter. Similarly, the unemployment rate remained at 3.7% while wage growth came in at 4%. This is a sign that wages are now growing at a faster pace than inflation.
Further, inflation remains stubbornly high. While the PCE inflation figure came in at 2.9%, the headline CPI jumped to 3.4% in December. Therefore, there is a likelihood that the Fed will sound a bit hawkish in this meeting.
On the positive side, the Fed decision will come at a time when the fear and greed index has surged to the extreme greed zone and stocks have hit their record highs. This is a positive sign that cryptocurrency prices have more room to run. As such, I remain optimistic that HBAR, CFX, and INJ prices will continue rising this week barring any major new developments.
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