There are two paths ahead for the price of Bitcoin. Either the Fed will cut interest rate hikes or make soft statements. Or the SEC will approve the ETF. It seems unlikely for prices to exceed $32,000 by the end of the year without one of these two. Waller made important statements before the November 1st Fed meeting. So what did he say about rate hikes?
Federal Reserve Interest Rates and Cryptocurrency
At the time of writing this article, the price of Bitcoin is above the $28,300 resistance area. The king of cryptocurrencies needs weekly closings above $28,500 for further increases. Although the ETH news led to a rapid increase, it quickly erased the gains within 7 minutes after being denied. Now, all eyes are on the interest rate decision to be announced at the November 1st meeting.
The market expects interest rates to remain unchanged at this meeting. Indeed, there are members who want to see the full impact of interest hikes that have been in place for a long time. However, comments suggesting that there could be one more interest rate hike are worrisome. This situation leads to the constant postponement of the interest rate cut schedule. Investors who were expecting a cut in the first quarter have now postponed their expectations until June or even September 2024.
In his ongoing speech, Waller said the following:
“We will watch and see if further interest rate hikes are necessary. If the economy weakens, the Fed will have more room to wait. The resurgence of housing and service inflation is concerning. If we had seen inflation drop to 2.5%, the Taylor Rule would have told us to lower interest rates. We need to see how inflation will progress over the next 6-12 months and then consider interest rate cuts. We still have a plan for one interest rate hike, and whether it will happen or when will be determined by the data.”
This tone shows that even if there is no hike in the upcoming meeting, the Fed will not compromise its hawkish stance, indicating that the pressure on cryptocurrencies will continue. 90 out of 111 economists participating in a Reuters survey said that the Fed will keep the interest rate between 5.25% and 5.50% on November 1st. 91% of the participants believe that the Fed will wait until at least the second quarter of 2024 for an interest rate cut.
