FOMC: Bonds, Dollar, Inflation Decrees US Fed Bet On “Pause”, Peter Brandt Predicts Bitcoin Rally

The U.S. Federal Reserve bets on keeping interest rates unchanged at 5%-5.25% after the two-day Federal Open Market Committee (FOMC) meeting on Wednesday. The FOMC Dot Plot indicated Fed officials were mostly dovish on the interest rate decision and voted to “skip” in June for additional hikes later this year.

Wall Street giants remain bullish on crypto and stocks, as they correctly estimated historic drops in inflation data for May and June. JP Morgan, Goldman Sachs, Morgan Stanley, Bloomberg, Barclays, BMO, CIBC, Nomura, RBC, and Wells Fargo analysts actively believed in “no rate hike” in June. In fact, the CME FedWatch Tool also shows a 95% probability of the Fed keeping its policy rate unchanged.

The bond market expected the Fed to “skip” the rate hike in June, with treasury yields dropping, annual CPI and core CPI inflation cooled in May, and the US dollar continues to drop with the US dollar index (DXY) at 103. The global markets are also recovering from an economic slowdown with recession risks fading.

“The Fed will likely keep rates on hold at the June FOMC meeting for the first time since it began this hiking cycle in March 2022. Chairman Jerome Powell and Co. likely will characterize the decision as a “hawkish skip,” maintaining a bias toward hiking at the July meeting.”

Fed Chair Jerome Powell said Fed leaders prefer to wait to evaluate the impact of past increases on the economy, considering bank failures, debt ceiling, and issuing of Treasury bills by the Treasury Dept. The Fed will keep open its options to hike again in July or September.

Dow Jones, S&P 500, and Nasdaq futures rise as big money managers and investors drop bearish bets and buying stocks in anticipation of cooling inflation and the Fed skipping rate hike.

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Crypto Market Recovery After FOMC: Bitcoin, Ethereum Price to Rally

Wall Street analysts expect Bitcoin and Ethereum prices to bounce on positive macro factors. Veteran trader Peter Brandt predicts the BTC price action shows a “hinge” behavior as the price moved in equilibrium in the daily chart.

Moreover, a “tri-star bottom” pattern in the daily timeframe gives a bullish signal. However, the monthly chart shows a bearish setup, causing a sideways movement in Bitcoin over the last few days. Fed “skip” to break this dull price action and price to rebound.

BTC price continues to trade sideways in the last 24 hours, with the price currently trading above $25,960. The 24-hour low and high are $25,728 and $26,376, respectively. Meanwhile, ETH price currently trades above $1750. The 24-hour low and high are $1727 and $1761, respectively.

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