J.P. Morgan Predicts Federal Reserve Interest Rate Cuts
- J.P. Morgan predicts Fed rate cuts impacting crypto markets.
- Rate cuts anticipated in September and December.
- Crypto assets expected to see increased investment.
J.P. Morgan Global Research forecasts that the Federal Reserve will reduce interest rates by 25 basis points in September 2025, impacting major cryptocurrencies like BTC and ETH.
Rate cuts could enhance risk appetite in cryptocurrencies, potentially boosting investment in Bitcoin, Ethereum, and DeFi blue chips.
J.P. Morgan Global Research anticipates that the Federal Reserve will cut interest rates by 25 basis points in September 2025, followed by additional cuts. These forecasts stem from Michael Feroli, a trusted economist. (40 words max).
This projection could shift market dynamics significantly, affecting crypto assets. The projections come with the expectation that the Federal Open Market Committee may act amid weak job growth.
If interest rates decline, institutional investors might increase allocations to risk assets like BTC and ETH faster. No significant funding announcements or asset reallocations reported yet.
Rate cuts historically lead to liquidity moving toward risk and speculative assets, including cryptocurrencies. Such monetary actions can boost the appeal of alternatives to fiat currency amidst decreasing yields.
Historical precedents suggest a rise in trade volume in such circumstances, mirroring patterns seen in 2019 and 2023. “If labor markets remain solid, we would expect that FOMC members would prefer to wait and see how tariffs pass through to inflation… However, the weakness in job growth is great enough that the FOMC can reasonably argue it needs to manage downside risks by cutting rates,” remarked Michael Feroli, Chief U.S. Economist, J.P. Morgan.
By potentially cutting additional basis points, the Federal Reserve’s actions could strengthen speculative trading in crypto and DeFi sectors, where yield trades become emphasized amid the easing monetary landscape.
