The recent decline in Bitcoin prices is linked to new U.S. data, with Fed Chairman Jerome Powell hinting at a pause in rate cuts.
Interest Rate Cuts and Cryptocurrency Market
The Fed has begun cutting interest rates after reaching their peak. This year, a 100 basis point reduction was anticipated. Nonetheless, recent data have led to remarks from Fed members indicating a potential pause.
Remarks by the Fed Member
Fed member Goolsbee made significant statements, noting that the current Fed policy still exhibits a restrictive stance. He suggested that interest rates might not return to pre-pandemic levels and emphasized the need for inflation to reach 2%.
Market Expectations and Forecasts
After revisions in U.S. data, market participants have lowered their forecasts for rate cuts by 2025. Consecutive statements about a potential pause have slightly negatively impacted risk markets.
Despite current expectations, lower inflation data in the future may alter the market situation and lead to a revision in interest rate plans.
