The Fed signals a rate cut, the crypto market may welcome favourable information.

The Federal Reserve Board of Governors member Milan recently spoke out, suggesting that the median target range for the federal funds interest rate be set at around 2%. What does this mean? The current interest rate is almost 200 basis points above this target level.

In other words, this senior official is hinting that the Fed still has a lot of room for interest rate cuts. Although the pace of rate cuts has slowed in recent months, policymakers do not seem to rule out further cuts based on their statements.

Insights for the Crypto World:

• A low interest rate environment is generally favorable for risk assets (including cryptocurrency assets)
• If it really approaches 2%, it means there is at least 1-2 more opportunities for a 25 basis point rate cut.
• This gives the market an expectation - that liquidity may be more accommodative in the future.

However, it should be noted that speaking ≠ policy. The actual decision on rate cuts still depends on the FOMC meeting and CPI data. But this at least indicates that the hawkish stance may be gradually easing.