Crypto Market Waits Anxiously as Economist Challenges Fed Rate Cut’s Effect
Bitcoin (BTC) prices are hovering at $112,645, marking a 3.7% monthly gain. Meanwhile, Ethereum (ETH) and Solana remain stagnant, with the total market cap stable at $3.9 trillion.
Stephen Moore, a prominent US economist previously nominated too the Federal Reserve by Donald Trump in 2019, cast doubt on the anticipated impact of the coming federal Reserve interest rate cut. His argument centers on the relevance of the cut, suggesting that the Fed shoudl focus on reducing the Interest on reserves (IOR).
Moore emphasizes that IOR, currently at 4.4%, is more critical as it dictates the earnings banks receive for parking excess reserves at the fed. This sum recently amounted to $3.5 trillion, generating approximately $186 billion in income last year. He insists that the Federal Funds Rate reduction would have minimal economic effect as most banks no longer rely on it.
- The pressing issue is the Fed’s decision between a customary pump-up or a cautious cut with stringent policies.
- Recent GDP numbers were comforting, while inflation remains a concern, exceeding the Fed’s 2.0% target considerably.
- However, the boldest potential push for cryptos could come from awaited ETF greenlights in October.
With Paul Atkins at the helm, the SEC faces crucial decisions regarding popular cryptos such as Solana, Ripple and Dogecoin. Market trends indicate robust enthusiasm for altcoin ETFs, with Google searches soaring, supporting the expectation of positive regulatory rulings.
