Just In: US Fed’s Patrick Harker Rules Out Rate Cuts Until 2024

President of the Federal Reserve Bank of Philadelphia Patrick Harker on Friday said was doubtful of interest rate cuts until at some point in 2024, amid concerns of uncertainty in the United States economy. This statement comes after Fed Chair Jerome Powell delivered a speech at the ongoing Jackson Hole meeting.

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Interest Rates: Hikes Or Cuts?

While being pessimistic about rate cuts in near future, Harker said however that he does not see the need for further rate hikes in the current scenario. This comes in line with the current market sentiment for the upcoming Federal Open Market Committee (FOMC) meeting scheduled for September 20, 2023, when traders expect the central bank to maintain the current target rate of 500 to 525 bps, as per the CME FedWatch Tool. On the flip side, Harker explained that the Fed’s outlook could alter if there is a sustained trend of cooling down of inflationary pressures.

“We are in a restrictive stance in my view and we are putting pressure on the economy to slow inflation. I don’t see a need for more rate hikes and my view could change if inflation pressures don’t continue their retreat.”

Earlier, CoinGape reported Powell speech at Jackson Hole, which stressed on the need for softer labor markets to lower the inflation. The Fed Chair also said the central bank staff plans to hold the interest rates at restrictive level until they are confident about inflation moving back to the 2% target.

Impact On Crypto Asset Prices

In the post-pandemic US Fed decisions, the central bank has largely been restrictive and majority of times, the Bitcoin price showed bearish signals in response to rate hikes. On the contrary, traders have at times preferred investing in crypto market when the traditional financial markets displayed high volatility. With the possibility of few more rate hikes already priced in for the upcoming FOMC meetings, Bitcoin price may not really react much.

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