The crypto market is currently abuzz with speculations surrounding the US Federal Reserve’s possible pause of interest rate hikes in its upcoming June 2023 meeting. While the market appears optimistic about a potential pause, some experts, like Standard Chartered bank CEO Bill Winters, believe that the central bank may not be entirely finished with its monetary policy tightening.
As it stands, the chances of a rate hike pause during the Federal Open Market Committee (FOMC) meeting are quite favorable, with a 73% likelihood according to the CME FedWatch Tool. This optimism stems from a belief that the pause at the current target rate of 500 to 525 bps will help stabilize the market.
However, not everyone shares this view. Harvard professor Jason Furman argues that the underlying strength in the US economy is too strong currently to warrant a continuous rate hike pause. He believes that despite aggressive rate hikes in recent months, inflation has barely made any progress. Bringing down inflation has historically been a challenging task, making it all the more likely that the Fed will resume rate hikes sooner rather than later.
Furman says, “I think the Fed’s going to pause at the next meeting. If you ask me if the Fed’s going to make a move in the next four months, I think that move is a rate hike and not a cut. Inflation has barely made any progress. There’s a lot of strength in this economy.”
If the market’s expectations for a rate hike pause are met, it could prove bullish for Bitcoin price, as the news could lead to a rise in the S&P 500 Index value. On the other hand, if there’s further rate tightening at the next Fed meeting, it could still potentially benefit the crypto market. Market movement towards risky assets like Bitcoin could be triggered due to the tightening.
With Ripple bagging another win and whales moving massive amounts of Shiba Inu (SHIB) and Dogecoin (DOGE), it seems that investors are preparing for the crypto market’s reaction to the upcoming decisions by the Federal Reserve.
In conclusion, while the market sentiment is leaning towards an interest rate hike pause, the eventual outcome remains uncertain. Investors are advised to conduct thorough research before making decisions related to their cryptocurrency investments, as market conditions and personal opinions can fluctuate and hold no responsibility for individual financial losses.
Source: Coingape
