Goldman Sachs, the world’s second-largest investment bank, expects the Federal Reserve to cut interest rates twice in the next two years. Starting from the third quarter of 2024.
Interest rates are closely related to investors’ risk appetite. Goldman Sachs previously predicted that the Fed would cut interest rates for the first time by December 2024, but this forecast has been raised to the third quarter of 2024 because Decreasing inflation Reuters news agencyreport On December 11
Two Fed rate cuts will bring interest rates to 4.875% by the end of 2024, from the previous forecast of 5.13%.
and from a Reuters report Also refers to traders.that believesthat stronger labor market performance would not prevent the Fed from cutting interest rates The first cuts are expected by Q1 2024, two quarters faster than Goldman Sachs’ forecast.
As Fed interest rates fall, risk appetite increases among traders in economic and financial markets. Including digital currency Rising interest rates are often used to control inflation and reduce the purchasing power of fiat currencies, which hinders the flow of capital into the cryptocurrency market.
When the Fed raises interest rates Traditional investment assets such as bonds and other fixed income assets will become more attractive to investors due to their stable returns. Investors, on the other hand, will move funds away from volatile assets such as cryptocurrencies. This results in decreased demand and may cause prices to correct or decrease.
But when interest rates fall Money will also start flowing into the equity and cryptocurrency markets again.
The Fed begins tightening interest rates in March 2022 amid rising inflation. They have risen from lows of 0%–0.25%, most recently increasing in July. However, with interest rate cuts expected in 2024 and the Bitcoin halving event scheduled for April, Both of these could be catalysts for the post-halving bull run.
refer : cointelegraph.com
picture nasdaq.com
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