Recent events in the U.S. economy, including the Federal Reserve's decision to lower interest rates, are significantly impacting the cryptocurrency market. Analyzing these factors may help to understand the sustainability of the current rise.
Reasons for Fed's Rate Cut
In an unexpected move, the Federal Reserve has decided to lower interest rates, signaling changes soon. Chairman Jerome Powell, known for his firm stance on high rates, has indicated a willingness to shift due to the worsening labor market.
Sustainability of Crypto Growth
The recent rise in the cryptocurrency market is not solely due to shifts in rates. Pressures in the labor market, including a staggering loss of 258,000 jobs, are drawing attention to the situation.
“Recent data shows 258,000 jobs lost just from May and June figures. This number surpasses the total population of Scottsdale, Arizona.” – CITE_NA
The question of whether the growth of cryptocurrencies is sustainable remains open, but moderate rate cuts are anticipated to support further development.
Fed's Strategy and Future Prospects
Powell's current actions indicate a need to reduce unemployment while potentially managing inflation. Continued plans for rate cuts are expected, but drastic changes in Fed policy are unlikely. Powell aims to smoothly transition policies to a more dovish successor by mid-2026.
Changes in Fed's economic policy could have lasting effects on the cryptocurrency market. Despite the rise, prospects remain uncertain, and central bank policies will play a crucial role in the ongoing development of the situation.
