Former Cleveland Fed President Loretta Mester focused on a possible Fed rate cut at the November FOMC meeting. Mester stated that a 25 basis point cut seems quite simple at this stage and explained why.
Reasons for Interest Deduction
Mester stated that inflation has fallen significantly from its peak and although the Fed’s 2% target is still not met, a 25 basis point rate cut makes sense. He emphasized that inflation data coming after the September FOMC meeting showed that inflation had decreased and maintained confidence that this trend would continue.
Mayor Mester said the unemployment rate has stabilized and jobs data indicates the labor market is healthy. Therefore, the Fed will need to implement monetary easing policies as the US economy returns to normal.
Mester’s comments followed the release of US employment data in October, which showed Nonfarm Payrolls increased by 12,000, falling short of the expected 110,000. The unemployment rate remained constant at 4.1%.
Loretta Mester said the lower-than-expected job numbers could be due to hurricanes in the US last month.
“I was pleased that the unemployment rate remained steady because it showed that the U.S. economy is not weaker than the Nonfarm Payrolls data suggested.”
Effects on Crypto Markets
25 basis point Fed rate cut, Bitcoin 
$69,491 It could be a catalyst for prices to surpass the current all-time high. Following the 50 basis point cut at the September FOMC meeting, Bitcoin and the overall crypto market reacted positively.
The interest rate cut decision will be announced just two days after the November 5 US presidential elections. The interest rate cut that will follow the elections may create an ideal environment for the revival of the BTC and crypto markets.
BitMEX co-founder Arthur Hayes stated that the crypto community should focus on the Fed’s decision rather than the US election. Hayes argued that the US election results will not have an impact on BTC. Instead, he stated that money printing and increased US debt issuance could support Bitcoin.
The 25 basis point interest rate cut by the Fed at its November meeting could have significant effects on both the economy and crypto markets. The impact of economic indicators and political developments on this decision is closely monitored.
Disclaimer: The information contained in this article does not constitute investment advice. Investors should be aware that crypto currencies carry high volatility and therefore risk, and should carry out their transactions in line with their own research.
