98% Odds of 25bps Fed Rate Cut on Oct 29 Boosts Crypto
Polymarket shows a 98% probability of a 25bps Fed rate cut at the Oct. 29 meeting, with only 1% odds of a larger cut or no change. Trading volume behind the 25bps Fed rate cut bet has surged amid weak private sector jobs data and US government shutdown risks. Evercore ISI cites delayed data and growth headwinds as factors reinforcing expectations of consecutive cuts before year-end. Bank of America Securities also forecasts that the Fed may halt balance sheet runoff alongside a 25bps cut. Crypto traders should monitor these developments for potential liquidity boosts and rallies in risk assets, including major cryptocurrencies.
Bullish
High odds of a 25bps Fed rate cut signal increased liquidity and lower borrowing costs, which historically support risk-on assets like cryptocurrencies. In the short term, the announcement could spark buying momentum across major coins as traders reposition for easier monetary conditions. Over the long term, consecutive cuts and the end of balance sheet runoff could sustain bullish sentiment, encouraging inflows into digital assets. However, traders should watch for market volatility around the decision and data releases that could alter expectations.