The Fed appears to be in a tender mood. The Agency announced it With inflation in America coming to a sudden standstill, members are looking to scale back plans to raise interest rates in the coming months.
The Fed Can Stop Raising Rates
Initially, the Fed was planning another big meeting in September. Now that the month has arrived, many bitcoin enthusiasts may be shivering in their shoes, as every time the Federal Reserve chooses to raise rates, the price of bitcoin appears to be affected, and not always in a positive way. In fact, since these meetings began several months ago, bitcoin has lost more than 60 percent from its all-time high of $68,000 per unit last November.
But the good news is that the organization now says inflation has peaked in the US. Many of us are still at home feeling the financial crunch, but on paper, things seem to have come to a halt. This may well be in the sense that the Fed will now seek to wind down its ongoing set of interest rate increases, which means that Bitcoin could seemingly get a breather in the coming months.
Yuya Hasegawa, a Bitcoin and Crypto Market Analyst at Bit Bank, explained in a recent interview:
Lower inflation may mean that the Fed may cut interest rate hikes from the September meeting. Of course, the market is not fully convinced of this until they see the CPI for July, which is due to be announced next Wednesday, but inflation is likely to decline in July due to lower oil prices, and Bitcoin is likely to benefit from expectations of a higher slower rate.
These interest rate hikes continued for some time as the US experienced its worst inflation run under Joe Biden. After being shot recently More than nine percentMany feel the burn when they enter the market to buy eggs, milk and bread or are at the pump looking to fill their car with gas. Prices are beyond what anyone thought possible, and bitcoin – like many assets in the world – has been hit hard.
Will Bitcoin return?
Cumberland, the Chicago-based market maker, also threw his year into the mix, saying:
If the Fed does blink, and pull back from the increased rates at the expected pace, the market will likely take it as a positive catalyst. It is amazing that even after a heavy selloff, while the market mantra was risk-averse everything, the average responder was still very optimistic. In our opinion, this is not strange. The shape of the forward curve already predicts an opportunity for rate cuts in 2023.
Despite the positive vibes, it’s easy to notice that we’re not quite out of the woods yet.
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