US Federal Reserve Expected to Cut Rates in 2024, Potentially Impacting Crypto and Traditional Markets

According to CoinDesk, the US Federal Reserve is expected to cut interest rates by 100 basis points in 2024, making it the most dovish among advanced nations' central banks. This move is likely to weigh on the US dollar, which could incentivize risk-taking in both crypto and traditional markets. Deutsche Bank Research indicates that traders anticipate at least a 1 percentage point cut from the current 5.25% to 5.5% range. A weaker dollar often becomes a tailwind to risk assets, including bitcoin, as seen in the second half of 2020 and early 2021. ING predicts that the US economy and inflation rate will slow down next year, allowing the Fed to pursue a looser monetary policy. Bank of America's Nov. 19 World at Glance report suggests that the tide is turning for the greenback, and it can start to adjust broadly lower towards equilibrium in 2023. Most advanced national central banks, led by the Fed, are expected to cut rates next year, having lifted them rapidly in the past 18-20 months to tame inflation. The coordinated easing could compensate for potential rate hikes by the Bank of Japan, which has been touted as a significant source of uncertainty for crypto and traditional markets.