Network economist Timothy Peterson warns the Federal Reserve interest rate decision in 2025 may trigger a crypto market collapse. Bitcoin can drop to $70,000 if the Federal Reserve delays in lowering interest rates. His data show the market only needs a slight occurrence to trigger a downtrend.
Federal Reserve Chair Jerome Powell recently indicated the central bank is in no hurry to alter rates. Powell emphasized the need for patience and clarity before policy changes. The Fed is eager to see the impact of economic policies before monetary actions.
Cautious Fed meets resilient economy
Market expectations are for multiple rate cuts this year. Investors have already discounted cuts starting in June. Powell’s comments, however, indicate a wait-and-see approach. The Fed continues to be prudent in the face of uncertainty over economic policy and trends in inflation.
The American economy remains resilient with a robust labor market and inflation at the Federal Reserve’s targeted level of 2%. Recent figures confirm steady wage growth and unchanged employment. However, risks to inflation persist, and there are those among the policymakers who prefer keeping the present rates for a longer duration.
There was moderate payroll growth in a recent jobs report, which supported the perception of the economy as being balanced. Powell said wages are rising at a sustainable rate, indicating a steady labor market. Unemployment did increase, though the overall outlook for the economy is still favorable.
Crypto market Jitters grow amid rate uncertainty
Peterson’s report warns the crypto markets can react sharply in the event the Fed is steadfast in maintaining the rates unchanged. Traders may seek justification for a sell-down in the absence of any easing. Bitcoin and other assets may face volatility as investors adjust their expectations.
The Fed continues to monitor trends in inflation as well as in economic performance. Powell insists the policy will be determined by shifting data, rather than by a preconceived course. Policymakers will weigh risks carefully before any changes.
Uncertainty reigns as markets look for clues to future rate actions. Investors remain vigilant, knowing any policy shift or mood change can produce big asset price movements.
