Definition ∞ Interest rate expectations refer to market participants’ collective outlook on future changes in central bank interest rates. These expectations are influenced by economic data, inflation forecasts, and central bank communications. They significantly impact financial markets, affecting borrowing costs, investment decisions, and asset valuations. Anticipated rate adjustments often drive market sentiment and asset price movements.
Context ∞ Crypto news frequently analyzes interest rate expectations from central banks, particularly the US Federal Reserve, due to their profound influence on global liquidity and investor appetite for risk assets. Higher interest rate expectations can lead to a reduction in speculative investments, including cryptocurrencies. Conversely, expectations of lower rates can stimulate digital asset markets, making this a critical macroeconomic factor for crypto market observers.
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