Financial markets have practically priced in a 25bp interest rate hike by the US Federal Reserve's Federal Open Market Committee (FOMC) as the base scenario. In this context, on-chain analyst Axel Adler Jr. analyzed that if signals for further rate hikes emerge, the downward pressure on stocks and BTC could intensify. He explained through his blog, "According to CME FedWatch, the probability of a 25bp hike is 92.7%, with interest rates expected to rise to 3.75-4.00%. Since 1988, there have been 7 instances where the Fed began an interest rate hike cycle, and in 5 of those 7 instances, the S&P 500 fell 6 weeks after the initial hike. The average return across all 7 instances was -2.83%. However, subsequent market trends depend on how long the tightening lasts and the economic situation at the time. Since the rate hike itself is largely reflected in the market, the key is what signals the Fed sends regarding future additional hikes. Stronger-than-expected tightening signals could put additional pressure on stocks and BTC."
