While the FED is expected to cut interest rates to boost Bitcoin (BTC) and altcoins, it is almost certain that a rate cut will be made in September.
While the dilemma here is whether to cut by 25 or 50 basis points, the JP Morgan economist argued that the FED will cut interest rates by 50 basis points in September.
Speaking on CNBC's Squawk Box, JP Morgan chief economist Michael Feroli said the Fed should cut interest rates by 50 basis points at its September meeting.
Feroli said he believes the central bank’s policy rate should be around 4%, which is 150 basis points lower than the current rate.
“We think they have good reason to accelerate the pace of rate cuts.
If we wait until inflation returns to the 2% target, we will probably be waiting too long.
“While inflation is still a little above target, unemployment is probably running a little above what they think is consistent with full employment. Right now, you have risks from both employment and inflation, but you can always change your course of reductions even if one of those risks materializes.”
According to the CME FedWatch Tool, investors are pricing in a 25 basis point cut by the Fed in September at 57% and a 50 basis point cut at 43%.
*This is not investment advice.