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US businessman Tom Lee shared his thoughts on the Federal Reserve’s next interest rate decision in an interview with CNBC last week. Tom Lee, who stated that inflation is on a downward trend, suggested that the Fed’s interest rate hikes may be completed.
Eyes on the Fed’s Interest Rate Decision in the Markets
In July, the Fed also increased its policy rate by 25 basis points in line with market expectations. Speaking live after the interest rate decision was announced, Fed Chairman Jerome Powell emphasized the critical importance of inflation data for the next interest rate decision. Many Fed officials have highlighted the importance of inflation data in their statements to the press in recent weeks.
However, the July interest rate decision by the Fed did not have a significant impact on the cryptocurrency market. After weeks of consolidation around $29,000, Bitcoin did not experience a sharp price movement following the interest rate hike.
The US inflation data announced last week came in below expectations. The annual CPI was reported as 3.2% and the Core CPI as 4.7%. Market expectations were 3.3% and 4.8% for CPI and Core CPI, respectively.
With the announcement of inflation data below expectations, expectations that interest rates will remain unchanged in the markets have strengthened. However, although inflation data has been trending downward since the July meeting, many Fed officials emphasized that inflation is still well above target and that additional interest rate hikes may be needed in the coming months.
Will the Fed Continue with Interest Rate Increases?
Tom Lee, managing partner of Fundstrat Global Advisors, evaluated the possible interest rate decisions by the Fed in an interview with CNBC last week. Tom Lee claimed that the recently announced Consumer Price Index signaled that inflation was on a downward trend. Lee mentioned that the CPI could decline to lower levels in the coming months and shared his thoughts that the Fed may have completed interest rate hikes for a while after the policy rate was increased by 25 basis points at the July meeting.
However, although Tom Lee claimed that Fed interest rate hikes have been completed, he emphasized that the expectations of investors are largely bearish. The American businessman highlighted that many stock investors do not share the same expectations despite the bullish expectations.
