Fed Rate Hike Pause Optimism Fades as Susan Collins Signals Delay
Crypto markets have been rangebound since the approval of Bitcoin ETFs. The US Fed’s interest rate decision was expected to provide relief, but the hawkish tone from Fed officials suggests rate cuts may be delayed. Boston Fed President Susan Collins stated that she needs more evidence of inflation returning to the target before considering rate reduction, although it may still happen later this year. Other Fed officials, including Chair Jerome Powell, have echoed similar sentiments. Economic data in the US, such as a surge in employment and higher-than-expected ISM Manufacturing PMI, supports the Fed’s decision to delay rate cuts. This uncertainty is likely to cause volatile trading in crypto markets.
Susan Collins Signals a Delay in Fed Rate Cuts
Boston Fed President Susan Collins has stated that she needs more proof of inflation returning to the Fed’s target before considering rate reduction, although it may happen later this year.
The Federal Open Market Committee had previously decided to maintain the target range for the federal funds rate and interest rate paid on reserve balances. The market had priced in a high chance of the rates remaining steady according to the CME FedWatch Tool.
Collin’s remarks align with those made by other Fed officials, including Chair Jerome Powell, who have indicated that economic conditions do not warrant immediate rate cuts.
Economic Data Points Towards Delay in Rate Cuts
Data points in the US, such as a surge in employment and better-than-expected ISM Manufacturing PMI, support the Fed’s decision to delay rate cuts.
While these data points are not the sole basis for the Fed’s decision, they raise concerns that a rate cut may take longer than anticipated.
Crypto Markets to Face Volatile Trading as Fed Concerns Loom
The Fed’s rate decisions are important indicators for investors, and the delay in rate cuts has caused uncertainty in financial markets.
Even a slight signal of future rate cuts can boost risk appetite and increase trading volumes in the crypto market. However, without positive cues, trading may experience turbulence.
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