Fed Rate Cut Expectations Rise as Inflation Slows, Boosting Bitcoin

On May 2nd, BRN's Chief Research Analyst Valentin Fournier highlighted in a report that despite the mixed macroeconomic performance, the slowing inflation trend has reignited market expectations for a Federal Reserve rate cut. According to the analyst's forecast, as the inflation trend approaches the Fed's 2% target, the expectation of multiple rate cuts is strengthening. This could potentially trigger a new round of liquidity injection into the market. Fournier noted that while stocks might be dragged down by an economic slowdown, alternative risk assets such as cryptocurrency are expected to benefit more from this scenario.

Mike Cahill, CEO of Douro Labs, emphasized that the U.S. jobs report, which includes data on non-farm employment, the unemployment rate, and wage growth, could significantly influence the Fed's upcoming interest rate decisions. Earlier data released this week indicated that the private sector added 62,000 jobs in April, which was lower than the levels seen in March. Cahill suggested that if the data released on Friday shows further weakness, it could strengthen expectations for a rate cut. This, in turn, could boost the price of Bitcoin. According to Cahill, institutions are closely monitoring these macroeconomic signals because Bitcoin is no longer seen merely as a risk asset. Instead, it is increasingly viewed as a macro tool for interest rate sensitivity and global transactions, aligning with its original design intent.