Main Points:
- Market Nervousness: Bitcoin and major cryptocurrencies, along with U.S. stocks, declined on March 18 as market participants awaited the outcome of the FOMC meeting.
- FOMC Timeline and Expectations: The Federal Reserve’s policy meeting began on March 18, with the results and Chairman Powell’s press conference scheduled for the afternoon of March 19. Although no rate cut is anticipated immediately, traders are watching for any dovish signals amid economic uncertainties.
- Broad-Based Declines: At the time of writing, Bitcoin was trading around US$81,300—a 3.5% drop over 24 hours—with altcoins such as SOL, ETH, and XRP experiencing even steeper declines. Equity indices like the Nasdaq and S&P 500 also fell by 1.7% and 1.1%, respectively, in the final trading hour.
- Future Rate-Cut Prospects: CME’s FedWatch tool indicates that traders see little chance of a rate cut in the next meeting, with only a 20% probability in May, while expectations for a cut in June rise to 66%.
1. Introduction
In the lead-up to the Federal Open Market Committee (FOMC) announcement, markets have exhibited heightened nervousness. Both the cryptocurrency sector and U.S. equities have been volatile, with investors bracing for potential shifts in monetary policy amid ongoing economic uncertainty.
2. Market Reaction and Cryptocurrency Declines
On March 18, a broadly positive risk sentiment was interrupted as the FOMC policy meeting commenced. Cryptocurrencies such as Bitcoin, along with altcoins like Solana (SOL), Ethereum (ETH), and XRP, fell alongside traditional markets. Bitcoin, for instance, experienced a 3.5% decline over the last 24 hours, trading at approximately US$81,300. This downturn reflects growing caution among investors who are wary of the potential policy signals that could emerge from the meeting.
3. FOMC Meeting Details and Interest Rate Outlook
The FOMC meeting, which began on March 18 and spans two days, is set to conclude with an announcement on the afternoon of March 19 following a press conference by Fed Chair Jerome Powell. While current market sentiment and recent economic data suggest that an immediate rate cut is unlikely, traders are closely monitoring any hints of a more dovish stance from the Federal Reserve. The possibility of the Fed softening its approach in response to recent economic uncertainties is a key focus, even though significant policy easing is not expected at this time.
4. Broader Implications for Financial Markets
The nervous sentiment among investors is not isolated to cryptocurrencies. Major U.S. equity indices, such as the Nasdaq and S&P 500, have also seen declines of 1.7% and 1.1%, respectively, as the market anticipates further clarity on monetary policy. The cautious trading environment reflects concerns that any deviation from the current hawkish stance—however slight—could influence risk asset valuations. Meanwhile, market expectations regarding future rate cuts remain mixed: while the CME FedWatch tool indicates only a 20% chance of a rate cut in the next meeting (expected in May), there is a significant increase in the likelihood of a rate cut in the June meeting, with probabilities rising to 66%.
5. Conclusion
In summary, as the FOMC meeting draws to a close, market participants are positioning themselves ahead of the forthcoming announcement. The decline in Bitcoin and other cryptocurrencies, alongside dips in equity markets, underscores the prevailing cautious sentiment. Although an immediate rate cut appears unlikely, any signs of a shift toward a more dovish stance could have important implications for risk assets. Investors are advised to monitor the situation closely, as the outcome of the FOMC meeting will likely influence market direction in the near term.
