Standard Chartered predicts that the U.S. Federal Reserve may lower interest rates by 50 basis points at its upcoming meeting. This view is based on the release of weak employment data in the U.S.
Interest Rate Prediction
In a report, Standard Chartered anticipates that the Fed will cut the interest rate by half a point this month. Previously, the bank had expected a 25 basis point cut, but revised its forecast following August's employment figures, which marked the weakest job growth in four years with an increase in the unemployment rate to 4.3%.
Optimism in the Cryptocurrency Market
A potential Fed rate cut could bring risk assets to the forefront. Reduced interest rates lower borrowing costs, potentially affecting cash flows into investment products, including cryptocurrencies. This assumption is supported by statements from Fed officials.
Fed Expectations and Their Impact
Markets currently expect a 25 basis point cut with a 90% probability. However, there is a 10% chance of a more substantial 50 basis point move. Inflation data scheduled for release on September 10-11 is likely to directly influence the Fed's decision. Fed Member Chris Waller mentioned that "we should begin with a rate cut in the next meeting" and hinted at multiple reductions within the next six months.
The decisions made by the Fed at the September meeting will be closely monitored across both traditional and cryptocurrency markets, as they are expected to have a direct impact on financial conditions.
