Bitcoin Bull May Awaken with FED's 8 Interest Rate Cuts: Citi Gives a Rise Recipe!
Citi analysts touched upon the possible change in the interest rate policy of the US Federal Reserve (FED) and the effects this may have on the cryptocurrency market.
He predicted that the Fed would reduce interest rates by 25 basis points eight times starting from September this year, and make a 200 basis point cut with a total of 8 reductions by July 2025.
It was stated that with this discount, the interest rate may decrease from the current 5.25%-5.5% to 3.25-3.5%. Analysts argued that the economic slowdown, weakening inflation, rising unemployment and negative service sector index may be effective in these reductions.
Data and Fed Chairman Jerome Powell's dovish statements revealed that the first interest rate cut will most likely come in September.
It was also emphasized that 10-year bond yields are already below 2-year yields, so there is less room for further decline, and rising budget deficits and inflation put upward pressure.
Citi stated that the unemployment rate is a more important metric and that the "Sahm Rule" recession indicator could be triggered in August if the unemployment rate continues to increase at the current rate.
Benefits the cryptocurrency market
Citi believes that interest rate cuts will have a positive impact on risk products, especially the cryptocurrency market, and reminded that such fuel is important for further rise.
As a result, the Fed's interest rate cuts were generally considered positive for cryptocurrency markets. In recent years, the Fed's money burning policy and interest rate reduction moves were among the main factors that triggered the rise in the cryptocurrency market.
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