Wall Street Estimates On US Federal Reserve Rate Hike Decision – Crypto News – Crypto News
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Wall Street Estimates On US Federal Reserve Rate Hike Decision – Crypto News

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The US Federal Reserve will announce another crucial rate hike decision during the FOMC meeting on Wednesday, February 1, primarily based on the aim to reduce inflation to 2%. Considering the cooling inflation and strong jobs data, Wall Street experts believe the Fed is likely to slow the interest rate hike to 25 bps.

Futures-tied US stock indexes Dow Jones, S&P 500, and Nasdaq 100 are down 0.50% ahead of the US Fed rate hike decision.

Wall Street Expectations On US Fed Rate Hike

The US Fed raised interest rates by 425 bps last year, with four consecutive 75 bps rate hikes and a 50 bps rate hike in December. Wall Street expects a further slowdown in rate hikes due to rising recession risk and debt.

JPMorgan estimates a 25 bps rate hike by the US Federal Reserve at the FOMC meeting. JPMorgan CEO Jamie Dimon earlier said the Fed may have to increase interest rates beyond 5%.

All top banks including Barclays, Credit Suisse, Citi, Goldman Sachs, HSBC, Nomura, and Wells Fargo expect a 25 bps rate hike by the US Federal Reserve. The expectations are based mostly on cooling inflation, strong jobs data, and an increase in the US GDP growth rate at 2.9% in the fourth quarter.

However, experts believe that Fed is unlikely to pivot as of now inflation is still above target. Christopher J. Waller, a member of the Federal Reserve Board of Governors, asserts the Fed needs six months of data, not three months of positive data to consider a pivot. Thus, the Fed is likely to pause the rate hike before their May 2-3 meeting.

according to CME FedWatch Toolthere’s a 99.3% probability of a 25 bps rate hike by the US Fed rate hike.

How It Will Impact Crypto Market

While the Fed is likely to raise the interest rate by 25 bps, a 50 bps rate hike is also on the table. If the Fed goes with a 25 bps rate hike and hints at a dovish stance, then Bitcoin price is likely to rally above $25,000. However, if Fed Chair Jerome Powell hints at hawkishness during the press conference, a fight between Bulls and bears will continue.

Bitcoin The price currently trades near the $23k level, up 1% in the last 24 hours. Meanwhile, Ethereum price is moving sideways, with the current price trading at $1,575. The crypto market will remain volatile during this week.

Also read, Budget 2023 India: Are Income Tax Changes Good For The Crypto Community In India?

Varinder is a Technical Writer and Editor, Technology Enthusiast, and Analytical Thinker. Fascinated by Disruptive Technologies, he has shared his knowledge about Blockchain, Cryptocurrencies, Artificial Intelligence, and the Internet of Things. He has been associated with the blockchain and cryptocurrency industry for a substantial period and is currently covering all the latest updates and developments in the crypto industry.

The content presented may include the personal opinion of the author and is subject to market conditions. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.

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