Today’s US CPI came in above expectations. Moreover, banks such as JPMorgan, Citi, Goldman Sachs predict that the US CPI will rise in the coming months. This made the Fed’s interest rate cut doubtful. Now, analysts’ Bitcoin predictions are pointing lower.
Bells are ringing for Bitcoin predictions of 100 thousand dollars!
The US Bureau of Labor Statistics announced the March Consumer Price Index (CPI) as 3.5%. This exceeded expectations of 3.4. CPI was the most effective data to resolve the debates about the timing of the Fed’s interest rate cuts. But Wallet Street banks predict inflation will rise before it cools again. Latest data released in an environment where the US economy is resilient means that the Fed will likely continue interest rate cuts for a longer time.
Bitcoin is witnessing headwinds such as the US dollar, 10-year Treasury yields and regulatory tightening. However, the halving event remains on the supportive side. However, experts predict that higher inflation will make it difficult for Bitcoin to rise to $100,000.
Wall Street expects warmer inflation in coming months
JPMorgan, Citi, Goldman Sachs, Morgan Stanley, Barclays, HSBC, UBS, BMO and Citadel predict that inflation will remain high in the coming months. Most banks expect CPI inflation to be higher at 3.4%. Previously, Fed swaps had shown that interest rate cuts were off the table in June and July. During this period, the indicator pointed to September for the Fed’s interest rate cuts. However, following recent developments, Fed swaps now show that interest rate cuts are expected in November.
On the other hand, CME FedWatch Tool points out that the probability of the Fed to cut interest rates by 25 basis points in June is 51% and in July it is 49%. Tool points out that there is a 40% chance that interest rates will be cut by another 25 basis points in September.
The Fed will most likely be patient!
JPMorgan Chief Executive Officer (CEO) Jamie Dimon warned earlier this week that interest rates of up to 8% were still on the table due to continued inflationary pressures from fiscal deficits and military conflicts, among other factors.
The US dollar index (DXY) rose to 105 after falling to 104 today. Fed officials, including Neel Kashkari and Jerome Powell, emphasized the need for more inflation data before considering any interest rate cuts. Additionally, Fed officials gradually became cautious. Meanwhile, the US 10-year Treasury bond yield increased from 4.35% to $4.5 after CPI. Thus, it reached the highest level since November. Bitcoin is moving in the opposite direction to the DXY and the 10-year treasury yield. The Fed will most likely be patient as CPI inflation rises above 3.2%!
Bitcoin predictions point to lower levels!
Analysts remain bearish on Bitcoin due to halving-related volatility. Among Bitcoin predictions, Markus Thielen predicts that the BTC price will drop to $62,000. He also predicts that ETH price will drop to $3,100 due to lack of trading volume. According to the analyst, investors need to carefully watch important levels such as $68,330 for Bitcoin and $3,460 for Ethereum.
Analysts such as Benjamin Cowen and Peter Brandt predict that the Bitcoin price will fall below $60,000 if BTC repeats a historical pattern seen during the spot Bitcoin ETF and past halving events.
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