- The cryptocurrency market has experienced a significant downturn ahead of the FOMC meeting, with Bitcoin prices falling over 5% to levels around $60,000.
- Major Wall Street banks, including JPMorgan and Goldman Sachs, have differing views on the Federal Reserve’s first interest rate cut date.
- Market analysts expect strong inflation pressure to force the Fed to keep interest rates high for a prolonged period.
The cryptocurrency market is in turmoil ahead of the FOMC meeting, with Bitcoin prices falling and major Wall Street banks at odds over the Federal Reserve’s interest rate plans.
Cryptocurrency Market Reacts to FOMC Meeting Anticipation
The cryptocurrency market has been under strong selling pressure due to risk aversion ahead of the FOMC meeting. This has resulted in a decline of over 5% in Bitcoin prices, pulling them down to around $60,000. The expectations for interest rate cuts, which were high at the beginning of the year, have significantly diminished. Initially, there were expectations for six rate cuts in January, but now only one rate cut is anticipated by the end of the year.
Differing Views from Major Wall Street Banks
Major Wall Street banks, including JPMorgan and Goldman Sachs, have differing views on when the Federal Reserve will make its first interest rate cut. According to CNN, both JPMorgan and Goldman Sachs expect a rate cut in July, while Wells Fargo is pointing to September. On the other hand, Bank of America predicts the first rate cut will occur in December. Some Fed policymakers are even considering the option of a rate hike instead of a cut.
Market Analysts’ Expectations
Market analysts expect the strong inflation pressure to force the Fed to keep interest rates high for a prolonged period. However, some have pointed out that this could lead to stagflation due to a contraction in GDP growth. Financial advisor Kurt. S. Altrichter stated that the US Fed is currently focused on two options: keeping interest rates steady or cutting them.
Conclusion
As the cryptocurrency market reacts to the anticipation of the FOMC meeting, the future of Bitcoin and other cryptocurrencies remains uncertain. If the Federal Reserve decides to keep interest rates high and inflation continues, short-term pressures may persist. However, this may not be a bad sign for the cryptocurrency market in the medium and long term. On the contrary, while assets like stocks, bonds, and real estate may fall, assets like gold, silver, oil, and Bitcoin are expected to provide significant returns.
