The US stock market showed little reaction at the open ahead of the crucial Federal Open Market Committee (FOMC) decision on interest rates while Bitcoin price continues to rise. The decision now gains all the more importance as it comes amid the banking crisis. A majority of investors believe that the Fed panel would go for a 25 bps hike while few think there will be no hike. Meanwhile, the crypto market is largely following a sideways pattern ahead of the decision.
According to the CME FedWatch Tool, around 85% of the respondents think the central bank will go for a 25 bps interest rate increase. Target rate probability for the upcoming Fed meeting had actually fluctuated with considerable share of investors believing there would be a no hike as the market dynamics changed with the bank crisis over the last two weeks.
US Stocks Open Flat
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The stock market opened flat on Wednesday as traders anticipate the Fed’s decision amid weakened sentiment around the banking sector. The Dow Jones Industrial Average, S&P 500 Index and Nasdaq Composite Index are currently down 0.09%, 0.09% and 0.15% respectively. Meanwhile, the Bitcoin price is inching closer to its recent high of $28,600 level, which is the highest it reached since June 2022. A 25 bps rise would mean the Fed sticking to its stance of tightening in its pursuit of bring the inflation down to 2% target.
However, investors will look for signs of easing and path to a Fed pivot amid the ongoing banking crisis that led to huge loss of value in the banking sector. Traders will be awaiting Fed Chairman Jerome Powell press conference, which is scheduled just after the interest rate decision is revealed.
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