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Highlights
- Chris Williamson of S&P Global Market Intelligence states, "We still think June looks the most likely."
- S&P Global Market's prediction comes right after Goldman Sachs had also reaffirmed the same notion on the Fed's June rate cut.
- Investors have historically given the Federal Reserve's rate choices a lot of weight when evaluating assets.
The market bets on the Fed June rate cut have increased with time, as the market tries to digest inflation and other economic factors. With a larger market consensus sticking to June as the favorable time for rate cuts, S&P Global Market Intelligence has also hopped onto the same bandwagon.
S&P Global Market Intelligence Expects a Fed June Rate Cut
Regarding the Fed’s first rate decrease of 2024, Chris Williamson of S&P Global Market Intelligence states, “We still think June looks the most likely.” He also added that the Fed would want to see the labor market cool before considering a rate cut. With Feb data being a little disappointing, it naturally would give them the idea of assessing the market first.
Goldman Sachs Sings Similar Tone
S&P Global Market’s prediction comes right after Goldman Sachs had also reaffirmed the same notion on the Fed’s June rate cut. Experts at Goldman Sachs initially projected that the Federal Reserve would cut interest rates for the first time in December 2024. In mid-December 2023, it announced a revision to its prediction and stated that the Fed would lower interest rates three times, with the first one occurring in the third quarter of 2024.
The famous investment business has now estimated that this year would see three rate drops, with the first one taking place in June. They also intend to make one cut in 2026 and four in 2025. According to their estimates, terminal interest rates will lie between 3.25 and 3.5%.
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Market Expectation on Fed Rate Cut
The market has priced in around three rate reductions for 2024 since December 2023; the first-rate decrease was expected at the March meeting. However, consistent indications from the Fed’s policymakers as well as economic data drastically decreased expectations of the same. This may affect the cryptocurrency markets.
Investors have historically given the Federal Reserve’s rate choices a lot of weight when evaluating assets. Lower interest rates typically result in the loss of value of government securities, which increases the allure of bitcoin and other cryptocurrency assets.
The decision by the Fed to delay rate reduction may cause investors to decide to temporarily hold onto traditional assets, which has caused market volatility for cryptocurrencies. Even better, a robust economy sustains high investment demand.
Riskier investments are preferred in economies that are doing well. It doesn’t seem likely in these circumstances that the Fed’s decision will halt the current rate of market expansion for cryptocurrencies.
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