Federal Reserve Interest Rate Decision Outlook: 99% Probability of Keeping Rates Unchanged in March
Key Information:
The Federal Reserve will announce its interest rate decision on March 20 at 2 AM Beijing time.
The probability of a 25 basis point rate cut in March is only 1%, while the probability of keeping rates unchanged is as high as 99%.
By May, the cumulative probability of a 50 basis point rate cut is 0.2%, while the cumulative probability of a 25 basis point rate cut is 18.6%, and the probability of keeping rates unchanged is 81.2%.
Market Expectations and Background Analysis
March Interest Rate Decision:
The market generally expects the Federal Reserve to keep rates unchanged in March, with a cut probability of only 1%.
This expectation reflects the complexity of current inflation pressures and economic growth, and the Federal Reserve may choose to wait and see.
May Interest Rate Outlook:
The cumulative probability of a 50 basis point rate cut is extremely low, at only 0.2%, indicating a pessimistic market outlook for significant rate cuts.
The cumulative probability of a 25 basis point rate cut is 18.6%, and the probability of keeping rates unchanged is 81.2%, suggesting a low market expectation for a rate cut by the Federal Reserve in the short term.
Economic Data and Inflation:
Current inflation rates are still above the Federal Reserve's 2% target, and recent economic data shows strong momentum in the U.S. economic recovery.
These factors make the likelihood of a rate cut by the Federal Reserve in the short term extremely low.
Impact on Various Asset Classes
Cryptocurrency Market:
Keeping rates unchanged by the Federal Reserve may provide short-term support to the cryptocurrency market, as the market liquidity environment remains stable.
If the Federal Reserve signals a hawkish stance, it may exert pressure on risk assets (such as Bitcoin and Ethereum).
Stock Market:
Keeping rates unchanged may provide short-term benefits to the U.S. stock market, as corporate financing costs remain stable.
However, if the Federal Reserve adopts a cautious stance on future policy, it may trigger market volatility.
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