Bitcoin (BTC) rebounded above $92,000 yesterday, but fell to $90,000 ahead of the US Federal Reserve's December interest rate decision, which will be announced on Wednesday.
While the market is confident that the Fed will cut the exchange rate by 25 basis points, Fed Chairman Jerome Powell's comments are expected to be important in determining the direction of BTC. For now, the likelihood of Bitcoin's rapid recovery to $100,000 is still tied to risk perception.
With just one day left until the Fed's decision, Standard Chartered said it expects the Fed to cut interest rates by 25 basis points.
Analysts at Standard Chartered said they believe December's interest rate decision will not be as easy as a 95-5 split, but will be narrowly decided at around 60-40, according to Reuters.
Analysts said the prolonged government shutdown has deepened disagreements within the Fed as it has limited economic indicators to use as the basis for rate decisions.
Standard Chartered predicted the Fed is expected to cut rates in December, but could keep rates on hold for an extended period of time until 2026.
The Fed may cut interest rates in January and March!
In addition to Standard Chartered, Citigroup economists also released their Fed rate forecasts. Citi analysts take a relatively moderate view.
Citi economists now say the Fed's rate cuts this week could lead to further rate cuts in January and March next year.
However, economists said the lack of release of key economic indicators due to the government shutdown could pose a problem for the Fed's future interest rate policy.
As a result, Citi assessed that the Fed is likely to prioritize managing short-term downside risks to the economy and continue lowering rates due to lags and gaps in recent macro indicators such as employment and inflation.
But Citi added that the lack of sufficient data means the Fed may issue messages from meeting to meeting and may not be able to give a clear signal on the timing or size of further rate cuts.
*This is not investment advice.
