According to research by 10x Research, the Federal Reserve’s (Fed) anticipated aggressive interest rate cut on September 18 may heighten economic concerns rather than instill confidence. Analysts from 10x Research predict that such a scenario could lead to declines in risk assets, including Bitcoin (BTC) 
$98,342.
10x Research: Cuts Over 25 Basis Points Could Shake Markets
Recent employment market data from the U.S. has set the stage for the Fed to lower interest rates, with an initial move expected next week on September 18. The markets currently assign a 50% chance to a significant 50 basis point rate cut planned for the upcoming week.
10x Research warns that a substantial 50 basis point cut on September 18 could lead to a negative start for risky assets, including cryptocurrencies. Central banks like the Fed typically adjust rates in increments of 25 basis points. However, larger changes, seen during the tightening cycle of 2022, indicated urgent actions to control inflation, reinforcing a risk-averse sentiment in the markets.
50 Basis Point Rate Cut on the Table
Markus Thielen, founder of 10x Research, addressed the issue in a recent client note, stating that a 50 basis point cut could lead to deeper market concerns, but the Fed’s primary focus will be on mitigating economic risks rather than managing market reactions. Thielen, who accurately predicted Bitcoin would rise to $70,000 in the first quarter, emphasized the possibility of such a rate adjustment.
Currently, the Chicago Mercantile Exchange’s (CME) FedWatch tool indicates a roughly 30% chance that the Fed will implement a 50 basis point cut, lowering rates to a range of 4.75% to 5%. Thielen noted that there are growing concerns that the Fed has fallen behind in addressing signs of weakness in the labor market since being caught off guard in July.
