Federal Funds Rate Set to Jump, Will Crypto Market Survive the Aftermath

• Federal funds rate could see an uptick, the highest in 17 years.
• Economic indicators set to drop this week could raise investors’ concerns.
• The cryptocurrency market is likely to be unaffected by sentiments in the traditional market.

With several economic indicators set to drop this week, investors’ and consumers’ spending could be positively or negatively impacted. The indicators which monitor economic performance in the traditional market often influence investors’ and consumers’ spending.

In the lead is the Federal Open Market  Committee (FOMC) which is set to have its meeting today, amidst fears of an increased federal funds rate. All speculations point to tighter monetary policy, a decision that could negatively affect investors in the traditional market.

According to the CME Rate Watch Tool, there is a 98% chance that there would be an increase in the federal funds rate, taking the rate to a 525-500 basis. Should this happen, this increased rate will be the highest seen in nearly 17 years.

Inflation is still high in the U.S., despite the Federal Reserve easing the monetary tightening, briefly, last month. Nonetheless, the Federal Reserve has hinted at a continued tightening, which could raise investor concerns.

While concerns are high, there is the question of whether the increased rates would negatively affect the cryptocurrency market. Even though economic indicators influence investors’ interest and stir market sentiments, there is no evidence that they influence interests in the cryptocurrency market.

The cryptocurrency market sometimes manages to keep a steady performance despite turbulence in the traditional market. Although, macroeconomic factors that affect traditional markets often affect the crypto market too.

However, this year, the cryptocurrency market has held a decent performance, despite several macroeconomic fluctuations. Major cryptocurrencies like Bitcoin and Ethereum have held on strongly to their prices. Bitcoin in the past months has wavered between $29,000 and $31,000, recording largely positive performances since.

Data from CoinMarketCap show that the cryptocurrency market has, in the past 24 hours, declined by 0.17%. Even though major cryptocurrencies are currently in a decline, the market has maintained a decent run since the start of the quarter.

The Conference Board’s Consumer Confidence Index (CCI) is set to drop on Tuesday. Likewise, the Personal Consumption Expenditures (PCE) report will also go public on Friday. Additionally, the Initial Jobless Claims data set will be released on Friday.