Wall Street Estimates On US Federal Reserve Rate Hike Decision

The U.S. Federal Reserve will announce another crucial rate hike decision during the FOMC meeting on Wednesday, February 1, primarily based on the aim to reduce inflation to 2%. With inflation cooling and solid employment data, Wall Street experts believe the Fed has the potential to slow the rise in interest rates to 25 bps.

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Expect from Wall Street. About the rising rates of the American Fed.

The U.S. Federal Reserve raised the interest rate by 425 bps last year, with four back-to-back 75 bps increases and a 50 bps increase in December. Wall Street expects rate hikes to slow again as the risk of recession and debt increases.

JPMorgan believes the U.S. Federal Reserve will increase by 25 basis points at the FOMC meeting. JPMorgan CEO Jamie Dimon said earlier that the Fed may need to raise interest rates above 5 per cent.

All major banks, including Barclays, Credit Suisse, Citi, Goldman Sachs, HSBC, Nomura and Wells Fargo, are expecting U.S. Federal Reserve rates to rise 25 bps. Expectations are mainly based on the slowdown in inflation, solid employment data and an increase in the US GDP growth rate to 2.9% in Q4.

However, experts believe the Fed is unlikely to pivot now as inflation is still above target. Christopher j. waller, a member of the Governing Council of the Federal Reserve, says the Fed needs six months of data, not three months of positive data to consider a pivot. The Fed should therefore suspend the rate hike before it meets on 2 and 3 May.

According to CME FedWatch Tool, there’s a 99.3% probability of a 25 bps rate hike by the U.S. Fed rate hike.

What are the implications for the crypto marketplace?

While the Fed may raise the interest rate by 25 bps, an increase of 50 bps is also on the agenda. If the Fed goes with a rate increase of 25 basis points and suggests an accommodative attitude, the price of bitcoin is likely to recover above $25,000. However, if Fed President Jerome Powell suggests that he is bellicose during the press conference, a battle between and the bears will continue.

Bitcoin price currently trades near the $23k level, up 1% in the last 24 hours. During this time, the price of the ether shifts laterally, with the current price at $1,575. The crypto market will continue to be volatile this week.

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