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JPMorgan And Citi Makes U-Turn On July Rate Cut Projection

JPMorgan and Citi have scrapped projections of July interest rate cuts by the Federal Reserve following the latest US Job data.
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JPMorgan And Citi Makes U-Turn On July Rate Cut Projection

Highlights

  • JP Morgan and Citi have shifted timeframes for a first-rate cut.
  • Institutional firms still project two rate cuts this year despite Fed leanings.
  • Bitcoin and altcoin prices recorded declining numbers as macro factors flipped.

Institutional giants JPMorgan and Citi have reversed their positions on a possible interest rate cut by the Federal Reserve in July. Both firms have now extended the timeline for a rate cut amid developing macroeconomic factors. The crypto market is down with assets posting reduced numbers amid skepticism ahead of the upcoming Fed meeting this week.

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JPMorgan Scraps Projected July Rate Cuts

JPMorgan has made a U-turn on anticipated rate cuts in July after the U.S. jobs report. The better-than-expected job report saw institutional sentiments weaken towards a possible Federal Reserve rate cut. Most economists now expect the Feds to maintain the status quo with the first cuts coming in September and a second in December. However, others opine for only one cut this year. 

This comes on the back of the US Jobs Report which saw a 272,000 job increase last month against the projected 190,000. The report opposed previous analysis on a slowdown in the labor market and will likely see Feds maintain current rates. Similarly, unemployment rates rose to 4% last month triggering wider macroeconomic concerns on the market.

At the start of the year, many analysts projected more rate cuts to bolster the financial markets but the push against inflation remains a key indicator of rate changes. Most financial institutions like JPMorgan predicted two rate cuts which saw bullish reactions from the financial markets. In Q1 2024, stocks and crypto assets notched gains with bulls anticipating multiple rate cuts.

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Impact on Crypto Market

Interest rate cuts have seen impacts on crypto prices over the years. This is because investors tend to remove funds from risky assets after each rate hike as seen in previous years. The recent projected shift in rate cuts led to a fall in crypto prices sparking wider liquidations. In the last 24 hours, crypto assets recorded losses before making a slight rebound. Bitcoin trades at $69,734, while Ethereum exchanges hands at $3,686, a 0.2% decline today.

Also Read: Bybit May Close China Offices, Offers Relocation to Staff

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David Pokima

David is a finance news contributor with 4 years of experience in Blockchain Technology and Cryptocurrencies. He is interested in learning about emerging technologies and has an eye for breaking news. Staying updated with trends, David reported in several niches including regulation, partnerships, crypto assets, stocks, NFTs, etc. Away from the financial markets, David goes cycling and horse riding.

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Why trust CoinGape: CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights to our readers. Our journalists and analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.
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