US Federal Reserve officials prefer raising interest rates to more than 6% in order to control inflation, even amid the US debt ceiling crisis.
US Federal Reserve officials, including Neel Kashkari and James Bullard, are discussing the possibility of further interest rate increases despite the serious debt ceiling crisis. This debt ceiling deal is expected to have an impact on the price of Bitcoin (BTC) as the US Treasury plans to issue government bonds to recover from the banking crisis.
The US Federal Reserve may continue raising interest rates due to inflation and a strong job market. Fed Chair Jerome Powell’s recent speech did not provide a clear direction. Additionally, other officials such as Lorie Logan, Philip Jefferson, John Williams, Michelle Bowman, and more from the Federal Reserve Board support the idea of further rate hikes.
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US Fed to Likely Raise Interest Rates Over 6%
On May 22, James Bullard, the President of the Federal Reserve Bank of St. Louis, stated that the central bank will need to increase interest rates two times this year before making a change in direction. The Federal Open Market Committee has already raised rates significantly to a range between 5% and 5.25%.
In addition, Neel Kashkari, the President of the Federal Reserve Bank of Minneapolis, supports the idea of raising interest rates to over 6% in order to control inflation. He mentioned that even if the Federal Reserve decides not to raise rates in June, it should not be seen as a pause or a change in direction since inflation has not yet reached the desired target.
“I believe it’s a difficult decision at the moment, whether to raise rates again in June or not. What matters to me is not giving the impression that we have completed our actions.”
According to the CME FedWatch tool, there is a 76% chance that the rate hike will be put on hold in June, which is slightly lower than the 81% probability reported a day ago. Additionally, the US dollar index (DXY) is increasing, leading to more selling pressure on the price of Bitcoin.
BTC Price To Break Below $25K
The price of BTC has been relatively stable over the past week, hovering around $26,800. During the last 24 hours, it reached a low of $26,415 and a high of $27,466. Large holders of BTC (whales) and miners are selling their BTC holdings because they expect the price of BTC to decrease due to broader economic factors.
Experienced trader Peter Brandt believes that the price of Bitcoin could drop below the $26,800 level and reach $24,800 before experiencing a rebound. Despite the correction, Brandt maintains a positive outlook, expecting the price of Bitcoin to eventually rise and potentially reach $40,000.
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.