JPMorgan Foresees No Immediate Fed Rate Cuts
- JPMorgan projects Fed to hold rates until mid-2025.
- Inflation concerns delay immediate rate cuts.
- Crypto markets subdued amid rate uncertainty.
JPMorgan’s chief economist Michael Feroli indicated that the Federal Reserve is unlikely to initiate any rate cuts until at least mid-2025, citing elevated inflation expectations.
JPMorgan’s outlook suggests a cautious stance from the Fed, with the market reacting by maintaining higher borrowing costs. This delay in rate cuts impacts cryptocurrency sectors, historically sensitive to monetary policy shifts.
Elevated Inflation Expectations
Michael Feroli, Chief U.S. Economist at JPMorgan, emphasized elevated inflation expectations as crucial in maintaining the Fed’s current rate posture. JPMorgan’s projections include mid-2025 as the earliest potential for rate cuts. Feroli stated,
“Elevated inflation expectations should reinforce the Fed’s extended pause in its rate cutting campaign.”
Impact on Crypto Markets
The immediate implications see crypto markets, including Bitcoin and Ethereum, under pressure. Historical data shows such periods of uncertainty keep volatility high but trading activity low, awaiting Federal Reserve guidance.
Effects on Traditional and Digital Assets
The decision by the Fed to maintain rates affects both traditional and digital assets. As borrowing costs remain high, financial markets are likely to experience limited inflows into risk assets, including cryptocurrencies.
Regulatory Standpoint
From a regulatory standpoint, although the Fed’s reserves remain steady, anticipation persists within crypto communities for any dovish shifts that could boost market sentiment. Historical trends indicate bullish rallies accompanying rate cuts, absent in current conditions.
Further insights include potential impacts on crypto market dynamics, with borrowed strategies possibly hinging on future rate adjustments. Market participants are watching closely for any official announcements from key figures such as Michael Feroli. The ongoing narrative points to a cautious approach impacting both crypto valuations and investor confidence.
