The Federal Open Market Committee (FOMC) has decided to forgo a rate hike in June due to the decline in bonds, the dollar, and inflation. Meanwhile, experienced trader Peter Brandt has made a bold prediction of a substantial Bitcoin rally in the near future
After the two-day Federal Open Market Committee (FOMC) meeting, the U.S. Federal Reserve has chosen to maintain interest rates at the range of 5% to 5.25%. The FOMC Dot Plot revealed a mostly dovish sentiment among Fed officials, indicating their decision to “skip” any rate hikes in June with the possibility of considering additional increases later in the year.
Major Wall Street institutions, including JP Morgan, Goldman Sachs, Morgan Stanley, Bloomberg, Barclays, BMO, CIBC, Nomura, RBC, and Wells Fargo, maintain a positive outlook on both cryptocurrency and stocks. These institutions accurately predicted significant declines in inflation data for May and June. Analysts from these firms unanimously estimated that there would be no rate hike by the Federal Reserve in June. The CME FedWatch Tool further supports this sentiment, showing a 95% probability of the Fed maintaining its current policy rate without any changes.
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Anticipating a rate hike “skip” in June, the bond market witnessed declining treasury yields. In addition, both annual CPI and core CPI inflation eased in May, contributing to the expectation. The US dollar index (DXY) further decreased, currently standing at 103. Furthermore, global markets are gradually recovering from an economic slowdown, and the risks of a recession are diminishing.
During the upcoming June FOMC meeting, it is expected that the Federal Reserve will keep interest rates unchanged, marking the first time since the hiking cycle began in March 2022. Chairman Jerome Powell and the committee are likely to describe this decision as a “hawkish skip,” indicating a continued inclination towards potential rate hikes at the subsequent July meeting.
Fed Chair Jerome Powell stated that Federal Reserve leaders are inclined to wait and assess the effects of previous rate hikes on the economy. Factors such as bank failures, the debt ceiling, and the Treasury Department’s issuance of Treasury bills are being taken into consideration. The Fed will maintain flexibility and keep its options open for potential rate hikes in either July or September.
Dow Jones, S&P 500, and Nasdaq futures are experiencing an uptick as prominent money managers and investors have significantly reduced their bearish positions. They are now actively buying stocks in anticipation of a moderation in inflation and the Federal Reserve’s decision to skip a rate hike.
Crypto Market Rebounds Following FOMC: Bitcoin and Ethereum Prices Set to Rally
Wall Street analysts anticipate a bounce in Bitcoin and Ethereum prices due to favorable macroeconomic factors. Notably, experienced trader Peter Brandt suggests that the price action of BTC demonstrates a “hinge” behavior, indicating a state of equilibrium in the daily chart.
Four closed#s within 3/10th of 1% range. This is the definition of price equilibrium. “Hinge” behavior. $btc pic.twitter.com/PaMDhodPvb
— Peter Brandt (@PeterLBrandt) June 14, 2023
Furthermore, a bullish signal has emerged with a “tri-star bottom” pattern, indicating upward momentum. However, the bearish setup on the monthly chart has led to a sideways movement in recent days. The Federal Reserve’s decision to skip a rate hike is expected to break this stagnant price action and trigger a rebound in prices.
In the past 24 hours, the price of BTC has maintained a sideways trading pattern and is currently above $25,960. The lowest and highest points during this period were $25,728 and $26,376, respectively. On the other hand, ETH is currently trading above $1,750, with a 24-hour low and high of $1,727 and $1,761, respectively.
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Important: This article is intended solely for informational purposes. It should not be considered or relied upon as legal, tax, investment, financial, or any other form of advice.
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