US Fed Rate Cuts To Start After Bitcoin Halving In Q3: Goldman Sachs

Bitcoin Halving: Goldman Sachs predicts first interest rate cut by the US Federal Reserve starting Q3 2024, how Bitcoin rally will impact?
By Varinder Singh
US Fed Rate Cuts: Crypto Markets Gauge Uncertainty With Mixed Signals

Investment bank Goldman Sachs on Monday said the U.S. Federal Reserve to start interest rate cuts next year, expecting the first rate cut to happen in the third quarter. The Fed officials have recently turned dovish on interest rate hikes, but believe further inflation and jobs data are required to decide on a potential pivot for rate cuts.

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Goldman Sachs Predicts Interest Rate Cuts Happening in Q3 2024

Goldman Sachs now sees two interest rate cuts by the U.S. Federal Reserve next year due to cooling inflation, reports Reuters on December 11.

The investment banking giant earlier predicted the first rate cut in December 2024. Now, it asserts rate cuts to start in Q3. This will cause interest rates to fall to 4.875% by the end of 2024, bringing a much-needed bullish momentum in the markets.

“Healthy growth and labor market data suggest that insurance cuts are not imminent… But the better inflation news does suggest that normalization cuts could come a bit earlier,” said Goldman Sachs economist Jan Hatzius.

Last month’s CPI and PCE inflation cools substantially coupled with dovish sentiment. However, Friday’s jobs data came in stronger than expected and indicates the U.S. labor market is still strong.

CME FedWatch Tool shows a 98.4% probability of the Fed keeping rates unchanged in the FOMC meeting this week. The current target rate is 5.25-5.50%.

Also Read: Binance Ends Bitcoin And Ethereum P2P Trading, But There’s A Catch

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How Bitcoin and Crypto Prices Will Impact?

The Fed officials remain skeptical of falling inflation and resonate to a dovish stance. Fed Chair Jerome Powell is under pressure to set plans for interest rate cuts. Traders brace for Fed rate decision this week, which will set a direction for the markets in the weeks to come.

A delay in Fed rate cuts could hinder BTC price rally during the Bitcoin halving, which is expected to happen in April. Bitcoin will undergo a correction in the event of a strong US dollar.

Institutional investors also seem to be moving away from the crypto market, with crypto funds inflows falling as compared to earlier weeks.

BTC price is currently trading at $42,160, paring earlier gains due to a broader selloff. The 24-hour low and high are $40,521 and $44,034, respectively.

Also Read: Crypto Market Selloff — Here’s Why BTC, ETH, XRP Prices Fell Sharply Today

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Varinder Singh
Varinder has over 10 years of experience and is known as a seasoned leader for his involvement in the fintech sector. With over 5 years dedicated to blockchain, crypto, and Web3 developments, he has experienced two Bitcoin halving events making him key opinion leader in the space. At CoinGape Media, Varinder leads the editorial decisions, spearheading the news team to cover latest updates, markets trends and developments within the crypto industry. The company was recognized as Best Crypto Media Company 2024 for high impact and quality reporting. Being a Master of Technology degree holder, analytics thinker, technology enthusiast, Varinder has shared his knowledge of disruptive technologies in over 5000+ news, articles, and papers.
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