Bitcoin Reacts To Market Expectations Of U.S. Rate Cut In May
Bitcoin regained momentum on Monday, surpassing the $43,000 mark as markets anticipate the initiation of the U.S. central bank’s rate-cutting cycle at the Federal Open Market Committee (FOMC) meeting in May.
The world’s largest cryptocurrency rose over 0.5% in the past 24 hours to reach $43,100. ETC Group’s Head of Research, André Dragosch, noted that the market expects the Fed to begin the rate-cutting cycle in May, a sentiment reflected in Fed funds futures. Despite Federal Reserve Chair Jerome Powell ruling out an earlier rate cut in March, Dragosch suggests that higher for longer rates and U.S. job numbers may increase the likelihood of an earlier cut.
While a delay in the rate cut until May might trigger a initial crypto sell-off, Dragosch anticipates a significant tailwind for Bitcoin in May, especially with a weak U.S. dollar. The mixed indicators in Friday’s U.S. job numbers, with strong job additions but declining average hours worked, raise concerns about the underlying health of the economy.
Clever Robot News Desk 7th February 2024