Fed Rate Cuts Not Coming Before June 2025, BTC Price Rally Delayed?

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In December 2024, the U.S. non-farm payroll data indicated that more jobs were added to the economy than forecasted. This development reduces the likelihood of a Federal Reserve interest rate reduction in March 2025, potentially postponing the predicted Bitcoin price surge to $200K this year.

Fed Rate Cuts Delayed To June 2025

Based on the employment figures released in December, leading financial experts predict that robust job growth could result in persistent inflation, delaying any potential interest rate reductions by the Federal Reserve for the near future.

In December, the U.S. job market experienced a significant growth with approximately 256,000 new jobs added, outpacing the forecasted 164,000. Conversely, the nation’s unemployment rate saw a decline, reaching 4.1%, which is lower than the anticipated 4.2%.

Goldman Sachs’ team of economists, headed by Jan Hatzius, have revised their predictions and now expect the Federal Reserve (Fed) to make interest rate reductions in June 2025, December 2025, and June 2026. In contrast to their previous forecast, they anticipate no cuts in March or September. They still hold onto their prediction that the peak rate will be between 3.5% and 3.75%. As for Bank of America’s economists, led by Aditya Bhave, a new report indicates that they also expect Fed rate cuts; however, specific dates were not mentioned in this context.

Following an exceptionally robust job creation in December, our analysis indicates that the period of interest rate reductions has come to an end. Now, it’s time to shift the discussion towards potential increases.

In simpler terms, economists Andrew Hollenhorst and Veronica Clark at Citigroup expressed in their report that they don’t have significant worries regarding situations where the Federal Reserve chooses not to reduce interest rates this year.

In simpler terms, job stability is better than anticipated, and prices and wages are decreasing, which might make policymakers feel confident enough to reduce interest rates or other economic measures, even if the overall economy remains robust.

BTC Price Recovery to See Delays?

After hitting record highs in December last month, the Bitcoin price has been experiencing downward pressure and dropped below $95,000. Concerns arise as the Fed’s rate cuts might prolong the Bitcoin price recovery due to a lack of new liquidity, as there are currently no new funds being injected into the market.

Bill Barhydt, founder of Abra Global, has predicted that quantitative easing (QE) and less restrictive bank policies will need to be implemented as solutions for the potential 30-year U.S. Treasury bubble. In a statement, he emphasized that Federal Reserve interest rate reductions alone won’t be enough to solve this problem.

Quantitative Easing (QE) is on its way, and reductions in the Federal Reserve’s interest rates won’t pop the 30-year Treasury bond bubble. It’s only through QE and more flexible banking policies that this can be achieved. So, get ready!

Beyond this point, financial experts on Wall Street express optimism about a potential Bitcoin price rebound, coinciding with an increase in the worldwide M2 money supply. As we approach Donald Trump’s inauguration in 10 days, the cryptocurrency sector is anticipating that his presidency could have a positive impact, often referred to as the “Trump effect.

Bitcoin Chop Won’t Last Long

Crypto expert IncomeSharks posits that Bitcoin’s present period of consolidation might be briefer and more optimistic than in past occurrences. “We’re fortunate we don’t have to endure a 7-month chop this time,” the analyst pointed out. Nevertheless, the analyst warned that the current 2-3 month consolidation could cause many investors to give up their holdings due to frustration.

Even though the current state is as such, IncomeSharks views the continuous market trend as a “consolidation pattern that leans more towards optimism,” implying a possible positive outlook for Bitcoin’s future course over the next few months.

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2025-01-11 12:04