📈 Expected liquidity and a strong boost for cryptocurrencies with interest rate cut forecasts
Michelle Bowman, a member of the Board of Governors of the U.S. Federal Reserve, confirmed that recent developments in weak employment data reflect the fragility of the labor market, supporting her view that interest rates should be cut three times during the current year.
Bowman explained that delaying stimulus measures could exacerbate the economic slowdown, noting that taking early action would be the best option to alleviate pressures and support economic activity.
📌 The impact on cryptocurrencies:
An interest rate cut means increased liquidity in the markets, which could positively reflect on high-risk assets, led by Bitcoin and Ethereum.
Expectations of monetary easing often enhance investors' appetite for crypto as an alternative refuge against inflation and loose monetary policies.
Markets may witness a new buying wave if the Fed confirms the timeline for these cuts.
💡 In summary: Any official confirmation of the start of an interest rate cut cycle could be the spark that drives cryptocurrencies to new heights in the coming months.