Crypto The market came under strong selling pressure due to risk aversion before the FOMC meeting. This brought the Bitcoin price down by over 5% to $60,000.
As Koinfinans.com reported, interest rate cut expectations have decreased significantly since the beginning of the year. Initially, there were expectations for six interest rate cuts in January. However, there is currently only one rate cut forecast by the end of the year.
Some of Wall Street’s leading banks have different views on the date of the Fed’s first interest rate cut. According to CNN, JPMorgan and Goldman Sachs expect a rate cut in July. On the other hand, Wells Fargo points to September.
On the other hand, Bank of America’s prediction is that the first interest rate cut will occur in December. Some Fed policymakers are even considering the option of increasing interest rates instead of reducing them.
Market analysts expect strong inflationary pressures to force the Fed to keep interest rates high for extended periods of time. However, some have stated that this could lead to stagflation as GDP growth contracts. Financial advisor Kurt. S. Altrichter stated that the US Fed is currently focusing on two options: keeping interest rates steady or download.
LIKELY MARKET REACTION: DOVISH SCENARIO
NEWS CONTINUES BELOWExpect a solid rally on the $SPX, especially if J-Powell only focuses on hold or cut and pushes back on the recent inflation bounce; September rate cut expectations should rise while risk assets rally and yields drop.
the $SPX would…
— Kurt S. Altrichter, CRPS® (@kurtsaltrichter) April 30, 2024
According to Altrichter, if the Fed decides to keep interest rates unchanged, then “The rally will continue. Stocks should welcome the Fed’s withdrawal of interest rate hikes, and while this may not be a significant bullish catalyst, it should support stocks. Value and cyclical stocks should lead the rise, and I expect the S&P 500 to rise less than 1%. Treasury yields should fall less than 10 basis points. The dollar should remain relatively quiet or fall slightly. A picture like “The commodity should see a small jump” may appear.
What Will the Cryptocurrency Market Experience at the FOMC Meeting?
Altrichter added that if the Fed becomes dovish, the S&P 500 could rise another 1%, exceeding 5,200, and he expects the 10-year Treasury yield to fall to 5.4%.
crypto market, FOMC It experienced a significant decline beforehand as concerns increased. Altcoins were negatively affected by this downturn, along with concerns about the Federal Reserve’s tendency to keep interest rates high.
scheduled for tomorrow Federal Reserve Uncertainty prevails in the markets before the interest rate announcement. While short-term pressures may persist if interest rates remain high and inflation persists, this may not bode well for the crypto market in the medium to long term. Conversely, assets such as stocks, bonds and real estate are declining, while assets such as gold, silver, oil and Bitcoin are expected to deliver significant returns.
