Economists predict that the Federal Reserve will cut interest rates by 25 basis points this month, with expectations of another cut before the end of the year.
Forecast for Fed Rate Cut
Economists and analysts overwhelmingly predict a 25 basis point Fed rate cut this month. Most expect another cut before year-end. Market sentiment is influenced by the CME Group’s FedWatch Tool.
Impact on Financial Assets
A rate cut typically boosts liquidity and can significantly affect risk assets. If dovish signals are confirmed, cryptocurrency markets may experience increased volatility and potential price uplifts for BTC and ETH.
Expert Analysis
Experts like Jim Reid from Deutsche Bank point out that inflation data gives the Fed room to cut rates. He noted: > "Taking the PPI categories that feed into core PCE... our U.S. economists see August core PCE inflation tracking at +0.32%, in line with their pre-PPI expectations. But the market focus was very much on the downside surprise in the headline number, as that was seen as giving the Fed more space to cut rates in the months ahead." Paul Donovan from UBS also highlights market views on the restrictiveness of the base rate.
The Fed's rate cut could increase liquidity, positively impacting cryptocurrency assets. This event is expected to drive higher protocol usage within the crypto community.
