Bank of America’s research arm, BofA Securities, expects the Federal Open Market Committee’s January 2025 meeting to produce continuity rather than surprises. Markets already price a high probability of an interest-rate freeze, and the firm foresees the committee reaffirming its current policy stance. At the same time, BofA warns that Chair Jerome Powell’s post-meeting remarks could devote notable attention to political considerations alongside monetary policy.
BofA Securities Forecast for FOMC Meeting
BofA’s analysis rests on market signals and recent economic readings that point toward stability. Futures markets imply an elevated chance—reported in recent coverage as above 95%—that the Federal Reserve will hold the federal funds rate steady in January 2025. Given that pricing, BofA expects the committee to emphasize continuity and predictability rather than deliver major policy changes.
Key Economic Indicators
Recent labour-market data showed a decline in the unemployment rate, a development the report describes as surprising and relevant for policy deliberations. A stronger labour market supports spending but can also feed inflationary pressures, so Fed officials will weigh that trade-off when explaining their view of the outlook.
Inflation measures have been moving toward the Fed’s 2% objective, and BofA notes the committee will likely consider the neutral interest rate (r*) in its discussions. If recent activity suggests a higher r*, that technical judgement could affect how restrictive the current policy setting is judged to be.
Jerome Powell’s Press Conference
BofA highlights that Powell’s post-meeting press conference may allocate substantial time to political matters, reflecting the interaction between policy communication and the public discourse in an election year. Powell will aim to explain policy decisions without appearing partisan, while also addressing how recent data—such as unemployment and inflation trends—inform the Fed’s stance. Investors will watch his wording closely for any subtle signals about future deliberations.
Market Expectations and Reactions
With markets largely aligned behind a steady outcome, the immediate outlook is for muted policy-driven disruption. Traders and asset managers will nevertheless scrutinize the statement and Powell’s answers for nuance, since even slight changes in language can alter expectations about future moves. For background on market pricing around a hold, see the coverage of the rate-hold probability.
For cryptocurrency and other risk assets, a stable policy outlook typically reduces one source of uncertainty and can make liquidity conditions clearer for valuation decisions. Still, crypto markets remain sensitive to shifts in liquidity expectations and wording, so readers interested in digital-asset implications may find the crypto outlook analysis helpful.
Expert Perspectives and Consensus
Other major banks broadly mirror BofA’s subdued expectations: Goldman Sachs has described a likely ‘hawkish hold,’ while J.P. Morgan analysts see a low probability of policy changes in January 2025. This alignment across firms reinforces the market’s current pricing and reduces the chance of a surprise driven solely by divergent forecasts.
Communication strategy remains central: the Fed aims to be transparent enough to guide expectations while defending its institutional independence. For related discussion on liquidity priorities tied to a hold, review the piece on the Fed’s liquidity priorities.
Why this matters
For miners operating in Russia with anywhere from a single rig to several hundred, a likely rate freeze mainly means one thing: macro-driven policy shock risk is lower around the meeting itself. That reduced risk can help calm short-term volatility in broader financial markets, which in turn can temper some spillovers into cryptocurrency prices. Nevertheless, market reactions to Powell’s language or to new economic data could still produce swings, so stability is not guaranteed.
What to do?
- Monitor Powell’s press conference for nuance: focus on any comments about liquidity, financial conditions, or the neutral rate, since these affect risk-asset flows.
- Keep operational readiness: ensure miners’ firmware, monitoring, and power arrangements are up to date to avoid avoidable downtime during volatile sessions.
- Review exposure and risk limits: if you hold significant crypto positions, consider whether short-term hedges or position sizing adjustments are appropriate given potential volatility around Fed communication.
- Follow market-implied signals: futures and other instruments will reflect changing probabilities quickly, so use them as one input among others when making trading or operational decisions.
