In the ongoing speculation about the FED's stance on interest rates, Morgan Stanley's chief US economist, Ellen Zentner, provides insights into potential changes.
Zentner's Forecast
Ellen Zentner predicts an upcoming series of interest rate cuts by the Federal Reserve. Contrary to market expectations, she suggests the FED will maintain rates for an extended period before implementing more significant reductions.
June Kick-off
According to Zentner, the initiation of interest rate cuts is expected to begin in June, with an initial 25 basis point reduction. She emphasizes that the FED's approach may demonstrate more patience than what the market anticipates. Subsequent reductions of 25 basis points each are forecasted for September, November, and December.
Bitcoin's Historical Link
Highlighting the impact of FED decisions on the cryptocurrency market, Zentner refers to Bitcoin's peak at $69,000 in November 2021, coinciding with the FED's interest rate hikes. The subsequent bear market is attributed to these rate increases, fueling speculation that a change in policy could potentially restore Bitcoin to previous highs.
Zentner's projections raise questions about the interconnectedness of monetary policies and cryptocurrency performance. As the FED contemplates a shift, investors keenly watch for potential implications on Bitcoin and the broader market.
While Zentner presents a compelling perspective, the market remains uncertain, and the actual effects of FED decisions on Bitcoin are subject to various factors. Investors are advised to monitor developments closely in this dynamic landscape.