Bank of America Predicts 4 Fed Rate Cuts in 2025 Amid Cooling Inflation

Bank of America (BofA) has forecasted four Federal Reserve rate cuts in 2025, scheduled for May, July, September, and December. This prediction comes as the latest US CPI and PPI inflation data have come in lower than expected, raising hopes that the Federal Reserve may ease its monetary policies. The decreasing inflation rates suggest that the economy may be cooling off, which could prompt the Fed to take action.

According to analysts, the increasing likelihood of a recession this year is another reason the Fed may cut interest rates in May. BlackRock CEO Larry Fink recently warned of a potential US recession, stating that it might already be happening. If recession fears continue to rise, the Federal Reserve is likely to intervene to stimulate the economy. Boston’s Fed President Susan Collins has also indicated that the Central Bank is prepared to step in if necessary.

Fed rate cuts are generally seen as bullish for the market, as they inject more liquidity into risk assets like Bitcoin and altcoins. The crypto market is known to thrive on such macro fundamentals, and a series of rate cuts could lead to a significant rally in the crypto space. However, the market remains uncertain due to ongoing trade tensions and tariffs, which could hinder the positive effects of the rate cuts.

Despite the potential benefits of the rate cuts, the crypto market faces challenges due to the ongoing trade war and tariffs. Traders are wary of the uncertainty caused by the tariffs and trade disputes between the US and other countries. The Bitcoin price, for example, surged past the $86,000 mark but sharply dropped below $85,000 due to reports of potential counter tariffs from the European Union. China has also shown no intention of backing down from the trade war, further adding to the market's uncertainty. Experts believe that the current outlook for Bitcoin remains bearish due to these factors.