Fed Rate Cuts in Focus: Markets Brace for Four Cuts Amid Crypto Turmoil

FED RATE CUTS: THE ULTIMATE PLOT TWIST! 🤯

Crypto markets were like a bad boyfriend – all up and down on Wednesday and Thursday, ahead of President Trump’s tariff announcement. It was like, “Oh, I love you, Bitcoin!” and then “Wait, I’m outta here!” as global markets tanked. Major tokens like Bitcoin (BTC), Ether (ETH), Solana (SOL), and XRP were like, “What’s going on, guys?” and then “Oh, I’m outta here!”

Prices Bounce Back (Like a Spring Coiled Snake) 🐍

But then, prices bounced back like a spring coiled snake on Friday morning! BTC stayed above $83,100, ETH reclaimed $1,800, and XRP, SOL, and ADA each rose over 2%. It was like they were saying, “Hey, we’re not done yet, folks!”

Investors were like, “Time to cash out, baby!” and moved large amounts of Bitcoin, ETH, and XRP into exchanges. Bitcoin transactions hit 2,500 BTC in one block, just hours after the speech. Coinbase saw more Bitcoin deposits, especially from big holders. ETH inflows peaked at 80,000 per hour, and XRP transfers to Binance jumped to 130 million in one hour, up from under 10 million the day before. It was like they were saying, “We’re outta here, and don’t bother chasing us!”

This activity showed investors were cashing out amid economic uncertainty, with demand for Bitcoin and ETH dropping as traders closed long positions to take profits. It was like they were saying, “We’re not buying it, folks!”

Traders Shifting Focus To Rate Cuts (The Ultimate Plot Twist) 🤯

But now, traders are like, “Wait, what’s going on? We were worried about tariffs, and now we’re worried about rate cuts?” It’s like they’re saying, “Hold on to your hats, folks, it’s a wild ride!” With the pressure easing, fresh economic data coming out later today could give markets a much-needed lift. It’s like they’re saying, “Don’t worry, we’ve got this!”

“Investors are watching closely for signs of weakness in the U.S. job market,” QCP Capital shared in a Friday update. “If the data is weaker than expected, it could lead to more Fed rate cuts this year to support the slowing economy.” It’s like they’re saying, “We’re watching, and we’re waiting!”

Markets Expect Four Rate Cuts This Year (The Countdown Begins) 🕰️

Markets are already expecting four rate cuts in 2025—0.25 basis points each in June, July, September, and December. Rate cuts help boost the economy by making borrowing cheaper. Short-term interest-rate futures now show a 70% chance of a Fed rate cut in June, up from 60% before the tariffs were announced. It’s like they’re saying, “We’re counting down, folks!”

However, Morgan Stanley expects the U.S. Federal Reserve won’t cut rates this year due to potential elevated inflation from Trump’s new tariffs. The Wall Street brokerage had previously predicted a 25 basis point cut in June. It’s like they’re saying, “Not so fast, folks!”

Fed To Keep Rates Steady? (The Great Debate) 🤔

Many Fed officials recently said they want to keep interest rates steady for a while to see how Trump’s policies affect the economy. Some are still worried about inflation and unsure if price changes will last. Fed Vice Chair Philip Jefferson added that there’s “no need to rush” into changing rates. It’s like they’re saying, “Take your time, folks, we’re not in a hurry!”

The Fed official noted that if the economy stays strong and inflation doesn’t drop, the Fed could keep rates at 4.25%-4.5% for a while. But if the job market weakens or inflation falls, the Fed will adjust accordingly. It’s like they’re saying, “We’re watching, and we’re waiting!”

Bitcoin and the broader market usually respond well to rate cuts since lower rates make traditional investments like bonds less attractive and a weaker dollar strengthens BTC as an inflation hedge. QCP Capital sees high volatility but suggests a potential short-term bounce due to oversold risk assets. It’s like they’re saying, “Hold on to your hats, folks, it’s a wild ride!”

Recession Concerns (The Ultimate Downer) ☹️

Luke Tilley, chief economist at Wilmington Trust, said the new tariffs raise the chance of a U.S. recession to 50%, warning that the economy could slow down in just three months if the tariffs stay. He pointed out that the real challenge is figuring out how much damage uncertainty is causing for businesses and consumers. It’s like they’re saying, “Uh-oh, folks, we’ve got a problem!”

We’ll get more insight into the Fed’s stance on Friday when Fed Chair Jerome Powell speaks after the March jobs report. Last month, Powell said he believes any inflation from Trump’s tariffs will be temporary, aligning with the White House’s view. It’s like they’re saying, “Don’t worry, we’ve got this!”

2025-04-04 10:23

Prices Bounce Back (Like a Spring Coiled Snake) 🐍

Traders Shifting Focus To Rate Cuts (The Ultimate Plot Twist) 🤯

Markets Expect Four Rate Cuts This Year (The Countdown Begins) 🕰️

Fed To Keep Rates Steady? (The Great Debate) 🤔

Recession Concerns (The Ultimate Downer) ☹️

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