Fed’s September Showdown: Rate Decision Looms - Crypto Markets Brace for Impact

Mark your calendars: The Federal Reserve's September meeting could rock crypto markets harder than a whale dumping BTC.

Rate Decision Countdown

Powell and crew face mounting pressure to maintain hawkish stance despite weakening economic indicators. Traders betting on dovish pivot might get rekt—again.

Crypto Correlation Game

Bitcoin's recent sensitivity to Fed rhetoric suggests whatever comes out of this meeting will send shockwaves through digital asset portfolios. Traditional finance still pulls the strings, whether crypto maximalists admit it or not.

Liquidity Tsunami or Drought?

Rate holds could unleash institutional FOMO, while hikes might trigger another risk-off cascade. Smart money's already positioning—retail will just chase the pump after the fact.

Because nothing says 'decentralized future' like hanging on every word from a centralized banking cartel, right?

When is the next Fed meeting?

The next meeting of the FOMC will take place over Sept. 16 and 17. During this meeting, the members will vote on the course of monetary policy and will compile their summary of economic projections.

What to Expect From the September Meeting

Fed watchers expect the central bank's policy committee to cut its influential federal funds rate for the first time since December.

Traders are pricing in a 93% chance that central bankers will cut the rate by a quarter of a point, to 4%-4.25%, according to the CME Group’s FedWatch tool, which forecasts rate movements based on fed funds futures trading data. They're predicting an outside chance of a half-point cut.

The bankers are also set to release their survey of economic projections, which shows where members of the committee expect the economy to be in the short- and long-term.

Read More

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Could Inflation Dampen Investors’ Rate-Cut Hopes?

Another variable in this month's meeting is who will be voting. President Donald TRUMP has appealed a court ruling that would allow Governor Lisa Cook to have her say next week, while senators have yet to approve Stephen Miran to fill an empty seat on the committee. Both decisions could come as late as Monday.

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What Are the Fed's Major Considerations?

Congress tasked the Fed with two key directives: keep employment high and inflation low.

The job market has become an increasing concern for central bankers over the last two months. Job growth is waning, and the unemployment level has ticked up.

Inflation has remained stubbornly above the Fed's 2% annual goal since March 2021. In fact, the Fed's preferred inflation measure has risen over the last three months.

Trump has been needling the Fed to dramatically lower rates and has threatened and criticized individual committee members, particularly Chair Jerome Powell.

What Happened at the Last Fed Meeting?

The Fed's policy committee voted to keep the central bank's key fed funds rate unchanged for the fifth meeting in a row. Two members dissented from the interest rate decision for the first time this year and voted to cut rates by a quarter of a point.

Fed officials said they were holding the rate steady at a higher-than-usual level to try to tamp down on stubborn inflation and voiced concerns that Trump's tariffs could exacerbate the issue.

How Does the Federal Reserve Work?

The Federal Open Market Committee (FOMC) is the monetary policy-making body of the Federal Reserve System, the United States's central bank. It holds eight regularly scheduled closed meetings each year.

The FOMC consists of 12 members: the seven board governors, the Federal Reserve Bank of New York president, and four other regional bank presidents who serve rotating one-year terms.

At each FOMC meeting, the committee members discuss economic and financial conditions and make decisions about monetary policy based on the dual mandate of keeping employment high and inflation low. The FOMC issues a public statement about its decisions after each meeting and the chair typically hosts a press conference to discuss the decision further after each meeting.

Want to Know More?

Want to know more about what happens behind closed doors at the FOMC meetings? Investopedia interviewed former members and reviewed meeting minutes and transcripts to find out. Read about it here.

 The FOMC also publishes the Summary of Economic Projections (SEP) once per quarter. The document depicts the members’ economic forecasts and their views on the appropriate federal funds rate path ahead.