Fed Official Eyes Another 50 Bps Cut Post US Job Data

Raphael Bostic, the President of the Federal Reserve of Atlanta, has hinted that he might favor another 50 basis point rate cut in November if US Job data improves. This conditional expectation is not unheard of as other Federal Reserve officials have hinted.

All Eyes on US Job Data

In an exclusive interview with Reuters, Bostic said the Federal Open Market Committee (FOMC) will emphasize US Job data at its November meeting.

“A surprise to the weak side …. would pull me much further into really needing another dramatic move,” Bostic said in the interview.

On September 18, the Federal Reserve Chairman Jerome Powell announced a 0.5% rate cut, the first in four years. However, he noted at the time that further rate cuts will hinge solely on market data. He confirmed that the Fed is open to further cuts or tightening depending on how the market evolves.

The US job data is a major yardstick to tell if inflation is falling or not. According to Bostic, the Feds need to be in a “restrictive posture” until there’s evidence inflation is falling.

To complement the stance from Bostic, Chicago Federal Reserve President Austan Goolsbee also reiterated that there might be more extensive rate cuts ahead. Goolsbee discounted a single rate cut, as he noted that this process might span for over a year. The Fed officials noted that the economy has normalized in no small measure but needs courting to make the trend permanent.

The goal remains to keep the inflation rate at 2% on an annualized basis in the long term.

Market Reaction To the News

The comments from the Federal Reserve officials comes at a time when the crypto ecosystem is in a consolidation mode. Bitcoin (BTC) price was changing hands for $63,112.16 as of writing, down by 4.08% in 24 hours.

Ethereum (ETH), Binance Coin (BNB), XRP and Solana (SOL) also dropped 3.03%, 4.85%, 4.91% and 2.21% respectively. With the current macroeconomic trend, top Analyst Markus Thielen from 10X Research predicts that Bitcoin price could reclaim the $70,000 level soon.

Rate cuts are known to impact the price of Bitcoin and the broader financial ecosystem. With more capital freed up, US Dollar might become devalued with investors exploring new avenue to save their funds. Firms like MicroStrategy are investing in Bitcoin as a reserve asset, a trend that if Wall Street adopts, might contribute to pushing the coin’s price upward.