Fed Governor Lisa Cook noted that the Fed will soon cut interest rates on hopes of a soft landing, and that Bitcoin will start to rise if US CPI inflation cools further.
Federal Reserve Governor Lisa Cook believes that the economy will achieve a soft landing as U.S. inflation and the labor market cool, suggesting that the Fed will soon begin to cut interest rates. Fed Governor Cook said that inflation will continue to fall and the unemployment rate will not rise sharply. Monetary policy adjustments and interest rate cuts are expected to trigger a sharp rise in stock prices and Bitcoin prices.
Fed Governor Lisa Cook optimistic about soft landing
Federal Reserve Governor Lisa Cook spoke at the 2024 Australian Economists Conference about monetary policy responses to the pandemic, the rise and fall of inflation in recent years, and the current monetary policy challenges generally faced. Cook pointed out that the current data clearly indicates that the Federal Reserve will cut interest rates, in line with the position of other central banks.
My base case (and the case of many outside observers) is that inflation will continue to move toward target over time, without unemployment rising further.”
Federal Reserve Chairman Jerome Powell also revealed in his testimony that the Federal Open Market Committee is paying more attention to the labor market given the recent cooling of CPI, PCE and PPI inflation data.
Traders and Wall Street banks expect a 25 basis point rate cut in September. In addition, the Chicago Mercantile Exchange's FedWatch shows that the probability of a 25 basis point rate cut on September 18 has risen to 70% from 46% a month ago. The data shows that there will be two rate cuts this year.
As CoinGape reported earlier, the market expects the U.S. Bureau of Labor Statistics to announce a decline in annual CPI inflation to 3.1%.
Bitcoin will start to rise after CPI rises
Bitcoin is bottoming out and market participants have started buying due to several factors. Traders expect BTC price to break through $60,000 if the CPI release is positive.
CoinShares reports that global institutional investors have begun buying Bitcoin, financial expert Robert Kiyosaki urged people to buy more BTC and gold, and traditional investors have also begun buying.
US spot Bitcoin ETFs continued to record inflows this week, with net inflows exceeding $800 million in the past four days. CoinGape also reported that several traditional investment companies such as Fiduciary Alliance are investing in ETFs such as BlackRock Bitcoin ETF and GBTC.
Bitcoin bull case remains strong as the impact of German government selling on Bitcoin price fades. The German government (Saxony) sold a large amount of Bitcoin, causing the price to fall, providing investors with an opportunity to buy on the dip.
Based on the historical BTC price response to CPI, 10x Research predicts that BTC prices are bottoming out and expects prices to surge after today's CPI data is released.
"We expect rate cuts could drive Bitcoin up to around $60,000. Yesterday, Bitcoin rallied to $59,350 on short covering ahead of CPI, in line with our upside expectations," said Markus Thielen, CEO of 10x Research.
BTC price is currently trading near $58,000, having previously reached a 24-hour high of $59,350. The price is down 1%, but still above the 24-hour low of $57,120. Additionally, trading volumes have fallen by 13% as traders await key inflation data. Buying volumes in the derivatives market were also low over the past 24 hours, with total BTC futures remaining at $28.9 billion.
