MEXCWall Street Estimates On US Federal Reserve Rate Hike Decision
The U.S. Federal Reserve will announce another crucial rate hike decision during the FOMC meeting on Wednesday, February 1, primarily based on the aim to reduce inflation to 2%. Considering the cooling inflation and strong jobs data, Wall Street experts believe the Fed is likely to slow the interest rate hike to 25 bps.
Futures-tied U.S. stock indexes Dow Jones, S&P 500, and Nasdaq 100 are down 0.50% ahead of the U.S. Fed rate hike decision.
Wall Street Expectations On US Fed Rate Hike
The U.S. Fed raised interest rate by 425 bps last year, with four consecutive 75 bps rate hikes and a 50 bps rate hike in December. Wall Street expects a further slowdown in rate hikes due to rising recession risk and debt.
JPMorgan estimates a 25 bps rate hike by U.S. Federal Reserve in the FOMC meeting. JPMorgan CEO Jamie Dimon earlier said the Fed may have to increase interest rates beyond 5%.
All top banks including Barclays, Credit Suisse, Citi, Goldman Sachs, HSBC, Nomura, and Wells Fargo expect a 25 bps rate hike by the U.S. Federal Reserve. The expectations are mostly based on cooling inflation, strong jobs data, and an increase in the U.S. GDP growth rate at 2.9% in the fourth quarter.
However, experts believe the Fed is unlikely to pivot now as inflation is still above target. Christopher J. Waller, a member of the Federal Reserve Board of Governors, asserts the Fed needs six months of data, not three months of positive data to consider a pivot. Thus, the Fed is likely to pause the rate hike before their May 2-3 meeting.
According to CME FedWatch Tool, there’s a 99.3% probability of a 25 bps rate hike by the U.S. Fed rate hike.
How It Will Impact Crypto Market
While the Fed is likely to raise the interest rate by 25 bps, a 50 bps rate hike is also on the table. If the Fed goes with a 25 bps rate hike and hints at a dovish stance, then Bitcoin price is likely to rally above $25,000. However, if Fed Chair Jerome Powell hints at hawkish during the press conference, a fight between bulls and bears will continue.
Bitcoin price currently trades near the $23k level, up 1% in the last 24 hours. Meanwhile, Ethereum price is moving sideways, with the current price trading at $1,575. The crypto market will remain volatile during this week.
Also Read: Budget 2023 India: Are Income Tax Changes Good For the Crypto Community in India?
- Pi Network Dedicates 350,000 Active Nodes for AI With OpenMind Partnership
- Breaking: Trump Cuts Tariffs as US-China Reaches 1-Year Trade Deal, Bitcoin Rebounds
- Binance Responds to Charges of Supporting Trump-Family Crypto USD1 and WLFI Soon After CZ Pardon
- SpaceX Makes Third Huge Bitcoin Transfer in 10 Days, Is Elon Musk Planning Something Big?
- Crypto Market Tumbles as Jerome Powell Says December Rate Cut ‘Far From Certain’
- Ethereum Price Flips BTC in Strategy Shift, Eyes $4500 Level
- Expert Predicts XRP Price to Hit $10 as Elliot Wave, XRPR ETF Inflows Align
- HYPE Price Prediction as 21Shares Files S-1 for Hyperliquid ETF—Can Bulls Push HYPE to $60?
- Bitcoin Price Rally Bound? How the Fed’s Move May Unleash Crypto
- Can ASTER Price Rebound 50% as Whale Activity and Bullish Pattern Align?
- Pi Network Patterns Point to More Gains Despite Manipulation Claims
Why Trust CoinGape
CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights Read more…to our readers. Our journal 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.
