Will rate cuts restart the crypto bull run? 🐂

Here’s what could happen next 👇

In 2022, the Fed raised rates to combat high inflation, which caused borrowing costs to rise and led to a fall in asset prices, triggering a bear market.

However, as rates fall, many expect that monetary easing could gently guide the global economy to a “soft landing.” If inflation doesn’t surge again and rate cuts help keep unemployment steady, central bankers could have accomplished something incredible—eliminating major economic uncertainty and achieving a level of global economic stability not seen in decades!

While the Fed’s latest economic projections appear to favor further rate cuts in the future, they also reflect the uncertainty of the situation, with inflation forecasts downgraded, GDP estimates flat, and unemployment expectations rising sharply. The rate cut decision suggests that the biggest economic risk has shifted from rising inflation to falling employment.

While Fed members and other central bankers are confident that they can manage these risks with further rate cuts, any sustained economic downturn could quickly turn into serious recession concerns. Global bond yields, which had been rising since Tuesday, fell only slightly after the rate cut was confirmed, suggesting that the market has already factored this in and is in the early decline since July.

While BTC rose above 63,500 in the short term after the rate cut news, the market may have started selling off soon after, erasing these gains before the close. While the initial excitement caused by the rate cut was obvious, traders are now closely watching how the economy responds to these changes!

I hope for a smooth transition, but I still need to be vigilant about the possible bumps in the road ahead. As the balance between inflation, employment and growth continues to unfold, it remains to be seen whether this will truly ignite the next crypto bull run or trigger deeper recession fears.