Statements from high-ranking Federal Reserve officials are stirring activity in financial markets. Recent comments from Christopher Waller may foreshadow changes for cryptocurrencies.
Christopher Waller's Statement
Federal Reserve Governor Christopher Waller stated that the central bank might reduce interest rates as soon as its July meeting. He noted the slowing economy and mentioned that the impact of tariffs on inflation would be muted and short-lived.
Waller also remarked that the Fed's benchmark rate is currently about 1.25% to 1.50% above the estimated neutral rate. He added:
> 'I think we’ve got room to bring it down, and then we can kind of see what happens with inflation. We’ve been on pause for six months to wait and see, and so far the data has been fine.'
Impact on Cryptocurrency Market
Waller's remarks came two days after the Federal Reserve kept interest rates unchanged between 4.25% and 4.50% while hinting at two more cuts later this year. Many experts believe that a rate cut would serve as a bullish signal for Bitcoin and altcoins like Ethereum, Solana, and Cardano. Historically, these assets have performed well during periods of rate cuts, as seen during the COVID pandemic in 2020 and 2021.
Demand Data for Cryptocurrencies
Third-party data indicates increasing interest in Ethereum and Bitcoin from Wall Street investors, possibly in anticipation of a Fed policy shift. Bitcoin spot ETFs saw $389 million in inflows on Wednesday, bringing total inflows for the month to $2.28 billion. Over the past three months, they have exceeded $10 billion, resulting in cumulative inflows of $46.65 billion. Similarly, spot Ethereum ETFs attracted nearly $1.5 billion in inflows over the last three months.
The upcoming actions of the Federal Reserve may significantly impact the cryptocurrency market, attracting investor interest and stirring activity in the financial markets.
