JPMorgan and Citi have scrapped projections of July interest rate cuts by the Federal Reserve following the latest US Job data.
JPMorgan Scraps Projected July Rate Cuts
JPMorgan has made a U-turn on anticipated rate cuts in July after the U.S. jobs report. The better-than-expected job report saw institutional sentiments weaken towards a possible Federal Reserve rate cut. Most economists now expect the Feds to maintain the status quo with the first cuts coming in September and a second in December. However, others opine for only one cut this year.
This comes on the back of the US Jobs Report which saw a 272,000 job increase last month against the projected 190,000. The report opposed previous analysis on a slowdown in the labor market and will likely see Feds maintain current rates. Similarly, unemployment rates rose to 4% last month triggering wider macroeconomic concerns on the market.
At the start of the year, many analysts projected more rate cuts to bolster the financial markets but the push against inflation remains a key indicator of rate changes. Most financial institutions like JPMorgan predicted two rate cuts which saw bullish reactions from the financial markets. In Q1 2024, stocks and crypto assets notched gains with bulls anticipating multiple rate cuts.
Impact on Crypto Market
Interest rate cuts have seen impacts on crypto prices over the years. This is because investors tend to remove funds from risky assets after each rate hike as seen in previous years. The recent projected shift in rate cuts led to a fall in crypto prices sparking wider liquidations. In the last 24 hours, crypto assets recorded losses before making a slight rebound. Bitcoin trades at $69,734, while Ethereum exchanges hands at $3,686, a 0.2% decline today.