Fed’s Hawkish Stance May Impact Market Outlook for Bitcoin Amid 2025 Rate Cut Uncertainty

John Velis, a macro strategist at BNY Mellon, anticipates no changes to interest rates at the upcoming Federal Reserve meeting. However, the release of the new Summary of Economic Projections (SEP) is expected to impact market expectations. The updated dot plot is projected to signal smaller rate cuts in 2025 than previously forecasted, challenging the market’s current pricing of nearly two rate reductions this year.

The Federal Reserve’s stance remains cautious amid persistent inflation concerns, with most policymakers signaling reluctance to ease monetary policy aggressively. This hawkish outlook could introduce volatility, as the market adjusts to a less accommodative trajectory. Given the limited number of remaining Fed meetings in 2024, significant policy shifts toward easing appear unlikely before year-end.