The crypto market and the financial community as a whole are waiting to see what the Fed's stance will be on future interest rate cuts. At this point, it is still unclear how interest rates will be cut. However, the Atlanta Fed issued a statement on Monday suggesting the Fed may continue to suspend interest rates after the first rate cut.
Fed maintains temporary rate cut even after first rate cut
Atlanta Fed President Rafael Bostic expects the Fed to suspend its next meeting to assess the economic impact of policy changes after its planned first rate cut, Bloomberg reports. said. Third quarter.
Bloomberg also said in a separate editorial posted on the Atlanta Fed's website on Monday that Bostic said businesses could become overly optimistic after the rate cut, stimulating additional demand and increasing price pressure. It also emphasizes that they have expressed concern that there is. He told a news conference that this could be another justification for delaying the rate cut.
This schedule could represent a slight departure from the central bank's previous promise to cut rates at least three times by 2024. However, its certainty has not yet been confirmed. If the data suggests that the Fed believes it is keeping inflation well under control, lowering rates may still be an option in the short term.
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Atlanta Fed's Previous Warning on Crypto Markets
The Atlanta Fed's statement comes just a week after it issued a warning to financial institutions about their handling of virtual currency transactions. In a statement, the Federal Reserve Bank of Atlanta warned other institutions about the dangers associated with virtual currencies and blockchain. The Atlanta Fed has taken a cautious approach, advising banks to adhere to all Federal Reserve Board guidelines when conducting crypto transactions.
How will the Fed's decision affect the crypto world?
Until now, investors have primarily used the Federal Reserve's interest rate decisions as a guide to valuing assets. Lower interest rates often reduce the value of government bonds, making assets like cryptocurrencies more attractive. Following the Fed's decision to postpone interest rate cuts, investors may continue to hold traditional assets, increasing volatility in the cryptocurrency market.
However, on the positive side, a strong economy maintains high demand for investment. In good economic times, purchasing power is often stable, favoring riskier investments. In such a scenario, the crypto market is likely to continue rising at its current pace, regardless of the Fed's decision.
