The Crypto Market has been in the doldrums, and the hawkish stance of the Fed Chair is pulling the crypto assets down. Bitcoin (BTC) values have tanked and fell below $20K before recovering again. Ethereum, which is in the midst of the Merge process, also showed sluggish growth. However, there could be good tidings for the Crypto Market, and this is as per a Fed official.
The Head of the Atlanta Federal Reserve, Raphael Bostic, feels the battle against inflation could envisage a slowing of interest rate hikes.
Crypto Market Await Next Hike
The Federal Reserve is the sole entity that can bring forth measures to combat inflation. It achieves this by quantitative tightening and interest rate hikes to combat high inflation levels. However, increased interest can also precipitate a recession which is the last thing the Fed will want.
In his Jackson Hole speech, the crypto sector tanked when the Fed Chair promised pain for households and businesses. Experts were terrified and expected a 100 basis point interest rate hike. The highest searing inflation in 40 years had to be cooled down.
In light of this, Atlanta Fed’s Bostic comments can bring good news to the crypto market. He revealed that Consumer Price Index in August was lesser than what was forecasted, and there is a glimmer of good hope. The cooling of inflation can even lead to a rollback of the 75 bps hikes.
The Personal Consumption Expenditure also reinforces the cooling of inflation. Personal Consumption Expenditure also enhances the cooling of inflation, and the crypto sector recovered smartly to both these good news. The data also hints that a 50-bps hike may be considered.
Next FOMC Meeting
FOMC meetings are scheduled for September 20-21, and the decision will be made on the quantum of an interest rate hike. Experts predict the possibility of a 75 bps is more than a 50bps hike.
The Federal Reserve decides on interest rate hikes. The next FOMC meeting is scheduled. The CME FedWatch Tool shows a 72.5% increase and a 27.5% chance of a 50-bps hike.