Last night, after the Fed‘s announcements, BTC now stands at $62,000. As the U.S. economy drifts from the narrative of a soft landing, concerns in risk markets are increasing. Although the Fed wants to lower interest rates, it has moved away from a target of a 75bp cut. The latest inflation data shows that the Fed faces significant challenges in its fight.
Fed Statements
Fed member Collins is currently making statements about the current situation. Collins dampened hopes by discussing the risks of starting interest rate cuts early. While a 150bp rate cut was expected at the beginning of 2024, today markets are not even sure of a 75bp cut. Here are the key points from Collins’ statements;
“I think demand needs to slow down for inflation to reach 2%. The recent declines in inflation are not surprising. Companies are well-positioned to absorb faster wage increases. There are risks in reducing interest rates too early. I do not expect the increase in productivity to be permanent. Monetary policy is ‘moderately’ restrictive. The economy is strong, and the employment market is reaching a better balance. I am optimistic that the Fed can reach 2% inflation within a reasonable timeframe.”
