Inflation data, which is closely followed by Bitcoin (BTC) and cryptocurrency markets, came below expectations. After this data, JP Morgan brought forward its expectation of FED's interest rate cut.
According to CNBC, US investment bank JP Morgan moved its expectation for the FED's first interest rate cut from November to September.
JPMorgan chief economist Michael Feroli said:
“FED Chairman Jerome Powell stated that he wanted to see more good data on the inflation front.
The data announced today is positive. We think that these data pave the way for the first interest rate cut in September.
“We expect to see interest rate cuts every quarter from now on.”
Previously, JP Morgan predicted that the FED would make its first interest rate cut in November.
Recently, Citi analysts also predicted that they expect the first interest rate cut in September and that the FED will reduce interest rates by 25 basis points eight times starting from September. Analysts added that they expect the FED to reduce the interest rate from the current 5.25%-5.5% to 3.25%-3% by making a total of 200 basis points of reduction in 8 months until July 2025.
While there is little time left for the FED to announce its July interest rate decision, the earliest interest rate cut is expected to be September.
At this point, according to FED Watch, the probability of interest rates remaining constant in July is priced at 91.2%, while a 25 basis point reduction in the meeting on September 18 is priced at 84.6%.
*This is not investment advice.