US Federal Reserve Officials Retract on Rate Cuts
After a strong jobs report, US Federal Reserve officials backtrack on their plans for rate cuts in the first half of 2024. The report shows resilience in the US economy, with non-farm payrolls increasing by 353K in January, exceeding expectations. This data lowers the odds of a rate cut in May or June.
Fed Presidents Express Caution
Austan Goolsbee, President of the Federal Reserve Bank of Chicago, states that he needs more proof that the Fed is on track towards its inflation goal before considering rate cuts. He believes decisions should be based on actual data and progress in inflation and jobs. Michelle Bowman, Federal Reserve Governor, also urges caution and expects inflation to cool further.
Economic Data Supports US Economy
The latest economic data, including retail sales figures, indicate the resiliency of the US economy. BlackRock predicts that the Fed may begin rate cuts in June, earlier than the European Central Bank. The Fed has hinted at cutting rates by 75-100 basis points by the end of the year.
Bitcoin Faces Macro Pressure
As investors monitor the Fed and Treasury Dept’s efforts to prevent another banking crisis, Bitcoin faces selling pressure due to rising macroeconomic factors. The US 10-year Treasury yield is above 4%, while the US Dollar index surges to a seven-week high. BTC price holds above $43,000 but may face delays in rallying due to macro pressures.
Hot Take: Fed Officials Push Back on Rate Cuts Before June, Macro Pressure Builds on Bitcoin
Federal Reserve officials are retracting their plans for rate cuts following a strong jobs report. This indicates resilience in the US economy and lowers the odds of rate cuts in the coming months. The cautious approach of Fed presidents and the positive economic data support this stance. However, Bitcoin faces macro pressure as Treasury yields rise and the US dollar strengthens. This may delay BTC’s price rally despite holding above $43,000. Traders are advised to closely monitor these developments to make informed decisions.
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