Basic moments:

1. Expectations from the Fed meeting

  • The US Federal Reserve System (FRS) is likely to leave its key interest rate at the current level of 5.25%-5.5% at its next meeting in August. This comes as inflation fell moderately in the second quarter and the labor market continues to weaken.

2. Prospects for a rate cut

  • Leading analysts predict that the Fed will begin cutting interest rates in September 2024. The decision could be announced at the Jackson Hole Symposium in mid-August, which traditionally serves as a platform for major Fed announcements.

3. Reasons for reducing the rate

  • Weakening inflation and rising unemployment indicate the economy’s vulnerability. Keeping rates high could hurt the labor market and undermine business and consumer confidence. Economists warn that additional external shocks, such as geopolitical conflicts or a stock market crash, could accelerate the recession.

Impact on the cryptocurrency market

1. Market reaction

  • Amid expectations of lower interest rates, the cryptocurrency market could see growth. Historically low interest rates are driving investment in risky assets like cryptocurrencies as traditional instruments like bonds and deposits become less attractive.

2. Volatility

  • At the same time, a potential Fed rate cut could cause volatility in cryptocurrency markets as investors closely monitor economic data and policy statements. Any unexpected changes in Fed policy could cause sharp fluctuations in cryptocurrency prices.

3. Long-term forecasts

  • Economists and cryptocurrency market analysts advise investors to be cautious and keep an eye on macroeconomic indicators.

  • If a recession begins, demand for cryptocurrencies as alternative assets may increase, but this will also depend on the overall mood in the financial markets.

Conclusion:

  • The economic situation in the US remains tense, and the Fed's decisions will play a key role in the coming months. Investors, especially in the cryptocurrency market, should closely monitor the news and be prepared for possible price fluctuations.#BTC #binance #Bitcoin

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