The recently announced inflation data came in below expectations, and this significantly affected the crypto market, especially Bitcoin (BTC).
Following this data, JP Morgan revised the Federal Reserve's (FED) interest rate cut schedule.
JP Morgan's chief economist, Michael Feroli, shared an optimistic outlook based on recent inflation data.
JP Morgan's revised forecast predicts that interest rate cuts will occur sooner, affecting Bitcoin and the overall cryptocurrency market dynamics.
JP Morgan Corrects Federal Reserve Rate Cut Schedule
JP Morgan announced that it has changed its forecasts for when the Federal Reserve will start cutting interest rates. Since the last inflation report was below previous estimates, the investment bank projected that interest rate cuts would begin in September. This date is earlier than previous November estimates.
Comments from Chief Economist Michael Feroli
While commenting on the new data, JP Morgan's chief economist Michael Feroli stated that FED President Jerome Powell expects more positive data on the inflation front. Feroli emphasized the positive aspect of current inflation statistics and expressed his confidence that September is a suitable time period for the first interest rate cut. He also predicted a series of interest rate cuts in the following quarters.
In Line with Citi Analysts' September Forecast
Consistent with JP Morgan, Citi analysts also predicted that the Federal Reserve would begin rate cuts in September. Citi projects that the FED will cut interest rates by 25 basis points eight times from September 2023 to July 2025. Accordingly, they expect the interest rate from the current 5.25-5.50% range to fall to the 3.00-3.25% range.
Upcoming Federal Reserve Decisions
With the Federal Reserve's July meeting approaching, market participants are waiting for the interest rate decision to be announced. According to Fed Watch, the probability of interest rates remaining unchanged in July is estimated at 91.2%. Additionally, the probability of a 25 basis point reduction at the September 18, 2023 meeting is 84.6%.
CONCLUSION...
JP Morgan and Citi's projections highlight a potential Federal Reserve policy shift triggered by recent inflation data. This development is especially important for investors in the cryptocurrency market, as it could affect BTC's performance and overall market trends in the coming months.
