Market Experts Lock Horns on September Fed Rates Cut
Highlights
- Dennis Lockhart says one or two cuts could come this year.
- While September might be possible, cuts might happen later.
- This comes as most financial institutions back a September date.
Dennis Lockhart, the former President of Atlanta’s Federal Reserve backs interest rate cuts this year but downplays the high expectations of early reductions in September. In a recent CNBC interview, the finance expert spoke on sticky inflation and the current movement of the Federal Reserve amid market factors.
Responding to questions on the positive Consumer Price Index (CPI) data and signs of reduced inflation, he noted that the report was positive without setting up any alarms. Still, inflation numbers might seem noisy month to month.
“The CPI report was moderately positive, and didn’t set off any alarms I think it suggests the moderation of inflation as you said. The inflation numbers tend to be somewhat noisy and month to month there are things that affect the underlying numbers. It is very hard to tell what the trend is…”
Lockhart Backs Watch and Wait Tactics
He added that the Federal Reserve will watch and wait as Chairman Jerome Powell previously noted. While this happens, Lockhart believes the September date might become unlikely because of numbers but tips one or two cuts later in the year.
The September date has been projected by many crypto and traditional finance analysts as macroeconomic factors become more bullish with a downward inflation trend. Jacob Mitchell the founder of Antipodes Partners stated that data suggest rate cuts in September.
Similarly, Morgan Stanley also pushed rate cut expectations to July as conditions cool. Several crypto traders opine on the same time frame.
Impact on Crypto Markets
Interest rate cuts by the Federal Reserve are expected to surge in new sentiments to the market as investors are likely to send more funds to risky assets. The recent CPI market has sent bullish signals in Bitcoin, altcoins, and meme coins. At press time, the price of Bitcoin stands at $67,173, an 11% weekly rise.
A delay in interest rate cuts might impact the potential of a bull run as anticipated by crypto market participants.
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