Federal Reserve Governor Lisa Cook sees a soft landing amid cooling inflation and labor market in the US, hinting at rate cuts starting soon by the Federal Reserve. Fed Governor Cook said inflation should continue to fall without significant rise in the unemployment rate. Change in monetary policy to start rate cuts is expected to trigger a major rally in stock markets and Bitcoin price.
Fed Governor Lisa Cook Upbeat on Soft Landing
At the Australian Conference of Economists 2024, US Federal Reserve Governor Lisa Cook talked about monetary policy response to the pandemic, rise and fall of inflation in recent years, and current common monetary policy challenges. Cook pointed out that the current data is evident for rate cuts by the Federal Reserve, aligning with other central banks on the pivot.
“My baseline forecast (and that of many outside observers) is that inflation will continue to move toward target over time, without much further rise in unemployment.”
Fed Chair Jerome Powell in a testimony also revealed the FOMC is focusing more labor market given the recent cooling CPI, PCE, and PPI inflation data.
Traders and Wall Street banks are pricing in a 25 bps rate cut in September. Also, CME FedWatch shows a rise in probability to 70%, from 46% a month ago, for a 25 bps rate cut on September 18. The data indicates two rate cuts this year.
The market expects the U.S. Bureau of Labor Statistics to announce a fall in annual CPI inflation rate to 3.1%, as reported earlier by CoinGape.
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Bitcoin to Start Rallying After CPI
Bitcoin is bottoming out and market participants have already started buying, according to several factors. Traders expect BTC price to cross above $60,000 in case of a favorable CPI release.
CoinShares reported that institutional investors across the world have started buying Bitcoin and financial expert Robert Kiyosaki urged people to buy more BTC and gold as traditional investors have also started buying.
Spot Bitcoin ETFs in the U.S. continue to record inflows this week, with more than $800 million net inflow in the last four days. CoinGape also reported several traditional investment firms such as Fiduciary Alliance are pouring money into ETFs such as BlackRock Bitcoin ETF and GBTC.
BTC bull remains strong as the German government selloff impact on BTC price wanes. German government (Saxony) offloaded huge amounts of Bitcoin leading to a price fall, giving investors buy the dip opportunity.
10x Research predicts BTC price is bottoming and expects a surge in prices after CPI data today based on historical BTC price action in response to CPI.
“We anticipated that a rate cut rally could push Bitcoin near $60,000. Yesterday, Bitcoin rallied to $59,350 due to short covering ahead of the CPI, fulfilling our rally expectations,” said 10x Research CEO Markus Thielen.
BTC price currently trades near $58,000 after hitting a 24-hour high of $59,350. The price is down 1%, but still higher than the 24-hour low of 57,120. Furthermore, the trading volume has decreased by 13% as traders await key inflation data. Buying in derivatives markets are also low in the last 24 hours and total BTC futures remained at $28.90 billion.
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Varinder has 10 years of experience in the Fintech sector, with over 5 years dedicated to blockchain, crypto, and Web3 developments. Being a technology enthusiast and analytical thinker, he has shared his knowledge of disruptive technologies in over 5000+ news, articles, and papers. With CoinGape Media, Varinder believes in the huge potential of these innovative future technologies. He is currently covering all the latest updates and developments in the crypto industry.
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
