Neel Kashkari, President of the Minneapolis Federal Reserve, has confirmed the necessity of rate cuts in 2025 in light of slowing economic indicators.
Need for Rate Cuts
Neel Kashkari stated that two interest rate cuts remain appropriate due to deteriorating economic conditions. Market predictions show a 90% chance for a September action, according to the CME FedWatch Tool.
Impact on Financial Markets
Kashkari's statements influenced financial markets by lowering U.S. Treasury yields. Expectations for rate cuts typically benefit major digital assets like BTC and ETH, boosting their valuations through liquidity changes.
Prospects for Cryptocurrencies and DeFi Contributions
Kashkari emphasized that the economic slowdown justifies adjusting the federal-funds rate. As rates decrease, an increase in total value locked (TVL) in DeFi is expected, which could positively impact assets such as BTC and ETH.
Kashkari's suggested rate cuts in 2025 might have a considerable impact on financial markets and create favorable conditions for risk assets, particularly cryptocurrencies.
