JPMorgan and Citi have both revised their forecasts regarding Federal Reserve interest rate cuts, now predicting delays due to new macroeconomic factors.
Both JPMorgan and Citi, two of the most prominent financial institutions in the world, have changed their minds on whether or not the Federal Reserve will reduce interest rates in July.
Both companies have extended the timeline for a rate reduction in response to the emergence of new macroeconomic circumstances. Amidst uncertainty in advance of the impending Federal Reserve meeting this week, the cryptocurrency market is experiencing a decline, with assets showing lower statistics.
JPMorgan Scraps Projected July Rate Cuts
Following the release of the U.S. jobs report in July, JPMorgan reversed its previous position regarding future rate cuts. Despite the fact that the job data was better than predicted, institutional opinions against a potential rate decrease by the Federal Reserve became more negative.
With the first cut coming in September and the second coming in December, the majority of economists now anticipate that the Federal Reserve will continue to preserve the status quo. On the other hand, there are many who believe that this year should only see one cut.
This comes on the heels of the job report for the United States, which showed that there was a 272,000 increase in employment last month, compared to the predicted 191,000.
The data contradicted previous analysis on a job market downturn, suggesting that the Federal Reserve would likely maintain current interest rates.
In a similar vein, the unemployment rate increased to 4% in the previous month, which prompted wider macroeconomic concerns on an international level.
The fight against inflation continues to be a crucial signal of changes in interest rates, despite the fact that many analysts predicted that there would be additional rate cuts to strengthen the financial markets at the beginning of the year.
The majority of financial institutions, including JPMorgan, forecasted two possible rate reductions, which resulted in favorable reactions from the financial markets. Stocks and cryptocurrency assets both posted increases during the first quarter of 2024, with bulls predicting further rate cuts.
Impact on Crypto Market
Over the years, reductions in interest rates have had an effect on cryptocurrencies’ value. As demonstrated in the years prior to this one, investors tend to withdraw funds from riskier assets after each rate hike.
The recent anticipated change in rate cuts caused a decline in cryptocurrencies’ pricing, which in turn sparked further liquidations. After suffering losses over the course of the previous twenty-four hours, crypto assets experienced a minor recovery.
Bitcoin is currently trading at $69,734, while Ethereum is trading at $3,686, representing a decrease of 0.2% thus far today.