Fed, BCE, BoJ: Central banks impose 3 status quo this week

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Bitcoin is trading at $77,311 this Friday, down 3.4% over 24 hours according to CoinGecko. He finds himself caught between the Binance hack and the central bankers who are saving their next turn of the screw for the end of the year.

On Wednesday, October 28, the FOMC maintained its key rate between 3.75% and 4.00%. The FOMC is the monetary policy committee of the Fed, and the vote was 10 votes to 2. Two members would have preferred to raise rates by a quarter of a point: Lisa Cook, governor of the Fed, and Beth Hammack, president of the Cleveland Fed. A month earlier, on September 16, the increase was voted unanimously.

Kevin Warsh was careful not to decide. Journalists questioned him several times about the meeting of December 8 and 9. However, the president of the Fed did not let anything filter through on the trajectory of rates. He preferred to announce a 2027 calendar of eight meetings. One of them will be devoted to monetary strategy alone, without a vote on rates.

The market has done its own reading. According to the CME's FedWatch tool reported by TheStreet, traders now estimate a roughly 78% chance of a 25 basis point hike in December. Robert Sockin, at PGIM, goes further and is counting on four quarter-point increases, one per quarter, starting in December. For bitcoin, each American increase makes the dollar more expensive and dries up the liquidity which nourishes risky assets.

Thursday October 29, Frankfurt unanimously left its deposit rate at 2.50%. The board of governors nevertheless “discussed the advisability of an increase in rates”, admitted Christine Lagarde. She weighed her sentence about December to the word: “If the situation we are observing today, which could have justified an increase in rates, is going to be confirmed, in this case, the direction to take is quite clear. »

The situation in question can be summed up in one number. Eurozone inflation rose to 3.8% in September, from 3.2% in August. Additionally, energy prices “continued to rise,” according to the ’s monetary policy statement. On Monday, a Reuters poll already gave 64 economists out of 73 in favor of an increase in December.

Machine-translated from French