Definition ∞ Rate cut expectation refers to the market’s anticipation that a central bank will reduce its benchmark interest rates. This sentiment is often driven by macroeconomic indicators suggesting a need for monetary easing to stimulate economic activity. Such expectations can significantly influence asset prices, including those of digital assets.
Context ∞ The current discourse surrounding rate cut expectations is largely dictated by inflation data and central bank commentary from major economies. Significant debate exists regarding the timing and magnitude of potential rate reductions and their impact on liquidity. A critical future development to monitor is how these macroeconomic shifts affect investor appetite for risk assets, including cryptocurrencies.
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