Fed Gov. Waller Raises Bets On Sept. Rate Cut, BTC ATH Soon?

Federal Reserve Governor Christopher Waller has stirred market optimism with his recent remarks about potential rate cuts by the central bank. Notably, his comments have increased bets on a possible rate cut by the Fed in September. Meanwhile, this development comes as Bitcoin enthusiasts eye an all-time high, driven by favorable market conditions and policy changes.

Fed Governor Waller Hints Towards September Rate Cut

Fed gov Christopher Waller’s recent statements have been a significant boost for market sentiment. Speaking at a Kansas City Fed program, Waller suggested that interest rate cuts are likely if inflation and employment data continue to align with current trends.

In addition, he mentioned that while the Fed hasn’t reached its final decision, the time for a policy rate cut is approaching. This aligns with other policymakers’ views, hinting at a potential move in September rather than the upcoming Federal Open Market Committee (FOMC) meeting.

Meanwhile, Waller outlined three potential scenarios: one where positive inflation data justifies a rate cut soon, another with fluctuating data pointing toward moderation, and a third with unexpectedly higher inflation forcing tighter policies. He considers the first two scenarios more probable, suggesting a rate cut might be near.

His remarks are notable given his previously hawkish stance on monetary policy. In May, Waller indicated that rate cuts were several months away, pending more convincing data on inflation’s decline.

However, his recent speech shows this threshold is close to being met. He pointed out that the labor market is stable, with expanding payrolls and cooling wage gains. Moreover, the latest Consumer Price Index (CPI) data shows cooling inflation in June, with the annual core inflation dropping to the lowest since April 2021.

Also Read: Why Crypto Is About To Skyrocket?

Bitcoin To Hit All-Time High?

The Federal Reserve Governor’s comments resonate with those of New York Fed President John Williams, who also noted positive trends in inflation data. Notably, this dovish stance from the Fed has led markets to price in a more accommodative monetary policy.

According to the CME FedWatch Tool, there’s a 92% probability of an initial 25 bps rate cut in September, with at least one more by year-end. Historically, Fed rate cuts have had a significant impact on crypto markets.

Lower interest rates can drive institutional investments into digital assets, propelling price recoveries and new highs. The current crypto market rally, combined with the Fed’s potential rate cut after Fed Gov.’s comments, has fueled optimism for Bitcoin reaching an all-time high.

In addition, several crypto market analysts like Ali Martinez have also shared a positive outlook on Bitcoin’s price. For instance, Martinez said that if BTC breaks the $66,250 level, it could rally toward a new all-time high.

During writing, Bitcoin price was up 1.3% and traded above the $65,000 mark. The investors are keeping close track of the crypto’s price and the significant levels. Additionally, Bitcoin Futures Open Interest rose nearly 2%, indicating strong market confidence towards the flagship crypto.

Also Read: Hong Kong Monetary Authority Unveils New Regulations For Fiat-Pegged Stablecoins