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Bitcoin price volatility remains strong, which is not good for altcoins. Will the Fed lower interest rates? Yes, market expectations show that rates will definitely decrease in September. The Fed has made decisions in line with market expectations so far, but with weeks to go before the decision date, this could change positively or negatively.
Fed Statements
The statements of Fed members following the latest data are crucial for understanding the current situation. Some of these statements could be early signals before Powell’s speech at the Jackson Hole Symposium on Friday. Indeed, Bowman was not so dovish in his recent remarks.
The key points of his statement can be summarized as follows:
- The strength of hiring may be exaggerated, and the rise in the unemployment rate may overstate cooling signs.
- While monitoring significant weakening risks in the labor market, we must still focus on price stability.
- Wage increases continue to exceed the pace consistent with our inflation target.
- I still see upward risks for inflation.
- Recent progress has been made in reducing inflation, but it is still uncomfortably above the committee’s 2% target.
- I will remain cautious in my approach to any changes in policy stance.
- Although the unemployment rate has risen, it is still historically low.
- If incoming data show inflation sustainably moving towards the target, it would be appropriate to gradually lower rates to avoid being overly restrictive.
- We must be patient and avoid overreacting to a single data point, which could undermine ongoing progress in reducing inflation.
- As risks to employment and price stability obligations balance better, we should consider the entirety of the data.
Will Cryptocurrencies Rise?
Bowman’s statements suggest a 25bp cut in September and a wait for one meeting. Even if the data is excellent, the high inflation figures in the first quarter of the year shook the Fed’s confidence. Although the last three months of data are correcting this, many Fed members continue to make cautious statements.
The main messages are expected to be delivered by the Fed Chairman on Friday. However, Bowman’s speech also teaches us that Powell might not signal a 50bp cut as suggested.
