The ECB could cut rates this week. Microsoft could also make a bang by adding BTC to its portfolio. (Photo By Thierry Monasse/Getty Images)
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Key Takeaways
The ECB will likely cut interest rates by 25 bps at its upcoming meeting.
Microsoft’s board will vote on whether to invest in Bitcoin following a recommendation from MicroStrategy’s CEO.
Gold prices have risen as investors anticipate U.S. inflation data, which could influence the Federal Reserve’s monetary policy stance.
A week of high-stakes decisions looms large. The European Central Bank (ECB) is gearing up for another rate cut, while Microsoft’s board will vote on adding Bitcoin (BTC) to its portfolio.
Meanwhile, gold prices are surging as investors await crucial U.S. inflation data.
The ECB may cut its rates by another 25 basis points (bps) this week, as policymaker Robert Holzmann suggested it is “conceivable” that a cut may happen on Thursday, Dec. 12.
Market expectations point to consistent rate cuts by the ECB at each of its meetings through next June. By the end of 2025, the 3.25% deposit rate is projected to fall to 1.75%, a level many economists believe could stimulate economic growth.
“Based on the current data, I consider a 0.25% point reduction possible at this month’s meeting, but not more,” said Holzmann, who also heads the Austrian National Bank.
The most relevant indicators to watch this week. Source: Investing.com
Expectations of sweeping import tariffs under U.S. President-elect Donald Trump are exerting upward pressure on inflation forecasts in Europe.
“We have a newly elected U.S. president influencing Europe’s inflation prospects. Trump’s policies could push inflation forecasts higher,” Holzmann said.
“Tariffs have two effects. First, they make everyone poorer as the relative cost of imported goods rises. Second, governments may attempt to offset these effects with increased spending, which further strains budgets. Both factors are likely to push inflation higher,” he added.
Microsoft’s Decision On Bitcoin
Microsoft’s board will vote on Dec. 10 to decide whether to add Bitcoin to its portfolio, as advocated by the National Center for Public Policy Research (NCPPR) and MicroStrategy’s CEO, Michael Saylor.
Supporters argue this move could cement Bitcoin as a mainstream asset, while skeptics, including co-founder Bill Gates, highlight concerns over its volatility and lack of intrinsic value.
At Microsoft’s December 2024 shareholder meeting, Michael Saylor urged the board to consider allocating a significant portion of its treasury to Bitcoin.
In a concise three-minute presentation, Saylor highlighted Bitcoin’s impressive performance, noting it has outpaced Microsoft’s annual returns by a factor of ten.
“Microsoft cannot afford to miss the next technology wave, and Bitcoin is that wave,” Saylor told board members.
Spot gold was up by 1% to around $2,650 per ounce, recovering from last week’s nearly 1% drop. U.S. gold futures also rose by 0.5% to $2,670.
Attention now turns to U.S. inflation data due Wednesday, which may influence whether the Fed adopts a “hawkish cut” next week.
Markets currently predict an 83% chance of a 25 bps rate cut this month, according to CME’s FedWatch Tool. Lower rates typically make non-yielding gold more attractive.
Fed officials seem poised for a rate cut after November data showed a cooling but still strong U.S. labor market.
Giuseppe Ciccomascolo began his career as an investigative journalist in Italy, where he contributed to both local and national newspapers, focusing on various financial sectors.
Upon relocating to London, he worked as an analyst for Fitch's CapitalStructure and later as a Senior Reporter for Alliance News. In 2017, Giuseppe transitioned to covering cryptocurrency-related news, producing documentaries and articles on Bitcoin and other emerging digital currencies. He also played a pivotal role in establishing the academy for a cryptocurrency exchange website. Crypto remained his primary area of interest throughout his tenure as a writer for ThirdFloor.
