- Truflation published a report on inflation and Fed policy.
- According to it, high-risk assets have become more resistant to an increase in the interest rate.
- However, experts said that the regulator will not soften the policy at least until May-June 2024.
High-risk assets, in particular bitcoin, have become more resistant to the Fed’s policy amid inflationary pressures. This is reported by CoinDesk with reference to the report of experts Truflation.
“Although we saw a slight pullback in the price of bitcoin on the background of news about CPI, in general high-risk assets behave as if the issue of interest rate cuts in March 2024 has already been resolved,” – said in a commentary to the publication representative of Truflation Oliver Rast.
Recall, on February 13, 2024, the U.S. Department of Labor reported that the Consumer Price Index (CPI) in annual terms is 3.1% – 0.3% lower than the previous value and 0.2% higher than expected. Bitcoin reacted to the news with a drop.
At the end of January 2024, the Fed decided to leave the interest rate unchanged. At the same time, the chairman of the agency Jerome Powell said that the probability of reducing the rate at the next meeting – in March 2024 – is extremely low.
Against this background, a number of experts said about the probable correction due to the inflated expectations of crypto traders.
“Until we see a clear trend of softening economic indicators, an interest rate cut will probably not be discussed. This May or June [2024],” Rust emphasized, “But perhaps the markets are just getting used to that reality.”
Notably, earlier a similar thesis was expressed by crypto expert Arthur Hayes. He stated that the correlation between the interest rate and the bitcoin exchange rate has decreased.
