Boston Federal Reserve President Susan M. Collins commented on a potential interest rate cut in 2025, which may affect inflation and financial markets, including cryptocurrencies.
Susan Collins' Rate Cut Forecast
Susan M. Collins noted that a possible interest rate cut in 2025 will depend on how inflation aligns with the Fed’s target of 2%. Market observers are closely monitoring these developments due to recent economic data.
Currently, there is a 90% probability of a 25 basis point rate cut by September, with speculation for another in October. These prospects are fueled by softer labor data and tepid manufacturing outputs. If enacted, this would signal a shift toward accommodating monetary policy, likely influencing risk appetites across financial sectors.
Historical Rate Cuts and Crypto Market Response
Recent Fed rate cut cycles in 2019 and 2020 spurred capital rotation into cryptocurrencies and tech sectors, leading to significant rallies in BTC and ETH, illustrating the macro-sensitivity of digital currencies.
According to CoinMarketCap, Bitcoin's price stands at $116387.88, with a market cap of $2.32 trillion and a market dominance of 60.66%. Over the past 90 days, BTC has risen by 12.86%, reflecting broader macroeconomic trends and market volatility.
Potential Impacts of Rate Cuts on Crypto Markets
The Coincu research team suggests that potential rate cuts could lead to increases in liquidity in crypto markets, amplifying risk appetites. Historically, dovish policy shifts have preceded rallies in digital assets, indicating possible near-term bullishness for BTC and other cryptocurrencies.
The projections regarding potential Fed rate cuts in 2025 are generating interest among investors and experts alike. Future changes in monetary policy could significantly impact financial markets and the development of cryptocurrencies.
