Bitcoin, and the crypto-community, are preparing for any Federal Reserve announcements that may be made on June 12, as financial markets get ready. As the Federal Reserve is expected to hold its federal fund rate constant at 5.25-5.50% as per the consensus, investors are now focusing on the details of their economic and financial projections.
Tomo, a crypto analyst (@Market_Look), shared his thoughts on Twitter. insights Illustrating the upcoming FOMC as a non-event to those anticipating drastic measures. He said, “Interest rates are likely to remain unchanged (5.25%-5.50%). There will likely not be any major changes to the statement or economic outlook, and the dot chart is expected to shift in a hawkish direction.”
Tomo’s report also highlights the anticipated changes in rate projections over the next few years. “In 2024, the rate will shift from 3 cuts to 2 cuts. The hawkish surprise will be 1 cut.” The market is already pricing in the expected changes, indicating that there will be minimal surprises and market volatility.
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“As of March, the distribution of dots for 2024 is 9 people in favor of keeping interest rates unchanged or cutting them twice, and 10 people in favor of cutting interest rates three or more times… a shift from three to two is already factored in.”
James Knightley, Padhraic Garcia, CFA and other economists from ING are part of the team. share The Federal Reserve is also expected to take a conservative stance. It is believed that the Fed’s emphasis on its fundamental mission will be emphasized. cautious stance Rate cuts could be further delayed due to high inflation rates and strong employment statistics.
The ING Team elaborated on its expectations. “The US Fed accepts that monetary policy is restrictive, but lingering inflation and strong jobs numbers mean it will indicate it’s prepared to wait longer before seriously considering interest rate cuts.”
It is expected that, in 2024, the projections for rate reductions will decrease from three down to one or possibly two.
Nick Timiraos, Wall Street Journal reporter, reports that JPMorgan and Citigroup retracted their prediction of a July rate reduction following last Friday’s jobs report. According to the Wall Street Journal’s Nick Timiraos, JPMorgan and Citigroup have withdrawn their predictions for a rate cut in July following the recent jobs report last Friday.
JPM and Citi dropped their plans for a cut in the July interest rate after Friday’s employment report.
Many professional Fed-watchers and economists on the sell side now predict that there will be one or even two rate cuts in this year’s September or December. pic.twitter.com/x9tUD06Pmi
— Nick Timiraos (@NickTimiraos) June 10, 2024
Bitcoin And Cryptocurrencies: What Impact?
Bitcoin and the wider crypto market has been very sensitive to macroeconomic data in recent times. The anticipation of a dovish turn—particularly any hints of rate cuts—could weaken the dollar and bolster Bitcoin and other digital assets as alternative investments.
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A reaffirmation or less dovish position than anticipated could also strengthen the dollar, and put downward pressure on the crypto market. But the nuanced viewpoints of FOMC members as expressed in the economic projections and dot plot could give clues on the medium-term path of cryptocurrency. US monetary policyThis could have a negative impact on investor sentiment.
The US dollar could be strengthened by a more hawkish stance, which would suggest fewer or later rate cuts. This might also put downward pressure Bitcoin, and other cryptocurrency. In contrast, dovish signals and indications that rate hikes will be softer in the future may boost the cryptocurrency market.
The tone of the FOMC’s press conference will depend on the remarks made by Chair Jerome Powell. Participants in the market will be closely watching his remarks for changes of tone with regard to inflation, economic expansion, and future adjustments to monetary policies. Interpreting these comments could have a negative impact. significant price movements Bitcoins and cryptocurrencies are a growing market.
A few hours before FOMC, US Consumer Price Index for May 2024 will play a crucial role. The Fed will use these data to make decisions and determine whether or not the current policy is still appropriate.
BTC was trading at $67.707 at the time of publication, down by -3.5% from yesterday’s $71,200 high.
Chart from TradingView.com, image from Shutterstock
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Source: www.newsbtc.com
