According to an economist, cryptography market players can underestimate how aggressive the American federal reserve will be in the coming months to move its political orientation, according to an economist.
“The markets underestimate the probability of rapid rate reductions in the coming months on the part of the federal reserve,” economist Timothy Peterson said in Cowtelegraph on Friday.
“There has never been a gradual reduction in prices like this currently envisaged by the Fed,” said Peterson, explaining that he expects that “the surprise effect” comes into play and that you potentially catch the market.
“It will shake substantially bitcoin and light up, and I think it will happen in the next 3 to 9 months.”
Peterson’s comments come only a few days after the Fed implemented its first rate drop of 2025 on September 17 by 25 base points, a highly anticipated event by the majority of the market, with ratings of 96% over the day, and a probability of 4% of reduced rates of 50 BPS, according to the CME Fedwatch tool.
The market anticipates another drop in rate in October
Bitcoin (BTC) has briefly increased to $ 117,000 before the announcement of the drop in Fed prices, but has since retired to the levels observed in the previous days, negotiating $ 115,570 at the time of publication, according to CoinmarketCap.
CME data show that market players are prices in a chance of 91.9% of 25 other basic points in Reunion on October 29, with only a probability of 8.1% that rates remain unchanged.
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Fed officials said two other drops in a quarter of a quarter of a quarter this year. However, the president of the Fed, Jerome Powell, said: “We are not on a predefined path.”
Financial institutions have been divided on Fed’s next decision
Some financial institutions expected a more aggressive rate drop at the September meeting, with standard forecast forecasts for a reduction of 50 base points.
The CEO of Goldman Sachs, David Solomon, was more confident than the Fed would stick to a cup of 25 base points.
The drop in interest rates tends to be optimistic for risky assets, including cryptocurrencies, because traditional investments such as term bonds and deposits become less lucrative for investors.
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