Crypto Market Braces for FOMC as Rate Hike Odds Surge to 40%

The cryptocurrency market is bracing for the upcoming US Federal Open Market Committee (FOMC) decision, as expectations of a Fed rate hike gain momentum. The recent surge in inflation has led to discussions over the potential next move by the US Federal Reserve with its monetary policy plans.

A Bank of America fund manager survey indicates that nearly 40% of participants now expect at least one rate hike within the next year, up from 16% in the previous month. This shift in outlook has weighed on the crypto market sentiment, as higher interest rates tend to reduce liquidity in the digital assets space.

The recent inflation data has further complicated the crypto market outlook for the US Fed rate decision. The US Consumer Price Index (CPI) rose 0.5% in May compared to the previous month, meeting market expectations. On a yearly basis, inflation climbed 4.2%, up from 3.8% in April.