Sen. Elizabeth Warren wants the Federal Reserve to lower interest rates by 75 basis points because she is worried about a possible slump. Warren warned in a letter that smaller cuts might not be enough to stop economic downturns.
The letter was signed by Warren and Democratic Senators Sheldon Whitehouse and John Hickenlooper. The letter, which was sent on September 16, came out just a few days before the September 18 meeting of the Federal Open Market Committee (FOMC).
If the Fed is too cautious in cutting rates, it would needlessly risk our economy heading towards a recession. A number of economists have warned of this risk since July… The Committee must consider implementing rate cuts more aggressively upfront to mitigate potential risks to the labor market. Sen. Elizabeth Warren to Fed on rate cuts
Warren Eyes Fed Rate Cut
The markets are expecting Fed Chair Jerome Powell to take a “dovish” action, but it is still not clear whether the central bank will choose a 25- or 50-basis-point cut. It was 61% likely that the rate would drop by 50 basis points, and it was 39% likely that it would drop by 25 basis points. The tool showed only a 14% chance for a 50 bps cut last week.
Crypto prediction sites like Polymarket also showed a small edge for a 50-bps cut, with a 53% chance of happening compared to a 45% chance for a 25-bps cut. Users used to like a 25-bps turn, and 78% of them predicted it before recent events.
They say that if the Federal Reserve does announce a rate cut, it could make risky investments like cryptocurrencies more liquid. Rob Viglione, CEO of Horizen Labs, said that a rate cut by the Federal Reserve could help the crypto market in the fourth quarter, which has always been a good time for Bitcoin and Ethereum. People look at the choice as a key sign of how the Fed feels about the risks of inflation and recession.
In the short term, we could see a price surge, especially in Ethereum and Bitcoin, though it may also bring heightened market volatility. Over the long run, a prolonged low-rate environment could encourage greater innovation and investment in blockchain technology and crypto-related startups. Rob Viglione, Horizen Labs CEO and co-founder
