- Recent inflation figures came in below expectations, affecting the crypto market and Bitcoin (BTC) significantly.
- Following the data, JP Morgan has revised its forecast for the Federal Reserve’s (FED) interest rate cuts.
- JP Morgan’s chief economist, Michael Feroli, shared an optimistic outlook based on the latest inflation data.
JP Morgan’s revised forecast suggests earlier interest rate cuts, impacting Bitcoin and the broader crypto market dynamics.
JP Morgan Adjusts Federal Reserve Interest Rate Cut Timeline
JP Morgan has announced an adjustment in its predictions for when the Federal Reserve will commence interest rate reductions. The recent inflation report, which fell short of prior estimates, has led the investment bank to project an initial rate cut in September, earlier than their prior forecast of November.
Chief Economist Michael Feroli’s Insights
Michael Feroli, the chief economist at JP Morgan, commented on the new data, stating that FED Chairman Jerome Powell had been seeking more favorable figures on the inflation front. Feroli highlighted the positive nature of the current inflation statistics, expressing confidence that September is now an appropriate timeframe for the first rate reduction. He also anticipated a pattern of rate decreases in subsequent quarters.
Citi Analysts Align with September Forecast
In agreement with JP Morgan, analysts from Citi have also forecasted that the Federal Reserve will initiate its rate cuts in September. Citi projects that the FED will reduce rates by 25 basis points eight times from September 2023 through to July 2025. Consequently, they expect the overall rate to fall from the current 5.25%-5.50% range to around 3.00%-3.25%.
Upcoming Federal Reserve Decisions
With the July meeting of the Federal Reserve fast approaching, market participants are anticipating the announcement of the rate decision. According to FED Watch, there is a 91.2% probability that rates will remain unchanged in July. Additionally, there is an 84.6% chance that a 25 basis point reduction will be made during the meeting on September 18, 2023.
Conclusion
The projections from JP Morgan and Citi underscore a potential shift in Federal Reserve policy, prompted by the recent inflation data. This development is crucial for investors, particularly those in the cryptocurrency market, as it could influence BTC’s performance and broader market trends in the months ahead.
