*Economic Data Drives Reassessment*
The Fed’s current interest rate target is between 5.25%-5.50%, which is still very high for the economy. However, the majority of the analysts expect a rate cut in September, but there’s debate on whether it will be a bit size or a huge chunk, especially since recent job market data was cooler than expected.
The sudden change in outlook follows robust economic data that has influenced Fed rate cut expectations.
*Market Response and Bitcoin’s Volatility*👀
In the meantime, Timiraos’ insights have spurred notable market movements. The U.S. stock market, initially down, rebounded with gains following the article’s publication.
Bitcoin also experienced a brief uptick, reaching $58,400 before settling around $57,800. Generally, easier monetary policy is viewed as beneficial for risk assets like Bitcoin.
However, given Bitcoin’s current bear phase, the implications of a more substantial rate cut remain uncertain. Some analysts argue that a swift rate reduction might signal underlying economic concerns, potentially leading to further price declines for Bitcoin.
As the Fed’s meeting approaches, the market remains divided on whether the central bank will opt for a 25 or 50-basis point cut. What is your take on this this?
Comment down !!
