Moody's Analytics Chief Economist Mark Zandi gave his opinion on a possible interest rate cut ahead of the meeting US Federal Reserve decision. The cryptocurrency community is closely monitoring this event, given how it will impact the cryptocurrency market.
The US Federal Reserve should lower interest rates
Zandi mentioned during interview With Bloomberg he believes the Fed should look to cut interest rates. He made these statements while saying that Financial circumstances is where they need to be with the Fed achieving its goal of achieving that Economic inflation Reaching a great level. He also hinted at the employment rate, indicating that the US Federal Reserve should not hold interest rates for too long.
Fed preferred Personal consumption expenditures (PCE) The price index as an indicator of inflation, has set a target of 2% for the inflation rate. However, Zandi questioned the move as he pointed out that 2% is not the correct number and should probably be higher. He also noted that there is no point in the US Federal Reserve sacrificing the economy in order to “change the inflation target to 2%.”
The Federal Open Market Committee (FOMC) meeting is scheduled to be held between June 12 and 13, during which it will also decide whether to cut interest rates or not. Data From the CME FedWatch tool it shows a 99.4% probability that the Federal Reserve will keep interest rates unchanged. These interest rates greatly impact the cryptocurrency market since lower interest rates will boost investors' confidence in investing in risky assets like cryptocurrencies.
Initial expectations were that the Fed would cut interest rates interest rates By the middle of the year, which presented a bullish outlook for the cryptocurrency market. However, this is unlikely now, as the Fed still appears dissatisfied with the current economic situation. This has also resulted Financial analysts at JPMorgan And Citi to cancel their initial forecasts and expect interest rates to be cut in September or November.
Some positives to hold on to for cryptocurrencies
There are still some positives to cling to even though the US Federal Reserve is unlikely to cut interest rates at its interest level. Next Federal Open Market Committee (FOMC) meeting Or one in July. For anyone, Ethereum ETFs Trading is expected to begin later this month or by early July. These funds will likely spark another spark in the cryptocurrency market just as the Spot Bitcoin ETFs did.
in addition to, Bitcoin ETFs They are back in the green and are seeing impressive demand for their money. Inflows into Spot Bitcoin ETFs and Spot Ethereum ETFs could be the catalyst needed to continue The bull ran In the crypto market. Meanwhile, market sentiment will undoubtedly become more optimistic if the US Federal Reserve eventually cuts interest rates in September or October as expected.
Featured image created with Dall.E, chart from Tradingview.com
