Will Bitcoin Price Surge if Fed Cuts Rates Amid ETF Approvals?

This week’s Federal Reserve Open Markets Committee meeting could reveal when the Fed will cut rates, which could have implications for Bitcoin exchange-traded fund (ETF) strategies. Despite favorable jobs and economic data, Inflation has not dropped the Fed’s 2% goal, making this week’s announcement tricky for Chairman Jerome Powell.

When the Federal Reserve meets from Tuesday to Thursday, it is expected to decide whether to keep the federal funds rate elevated or change it. Experts mostly agree that the US may not enter a recession, but the timing of when the Fed starts to cut rates will play a crucial role for Bitcoin and stocks in 2024.

Economists Say Fed Target Still Elusive

Speaking on Bloomberg Wall Street Week on Friday, PIMCO Multi-Asset Strategies Portfolio Manager Erin Browne said that before US jobs numbers came out, some investors were pricing in a 1.27% reduction in interest rates next year. Later, they tempered their expectations as the jobs report revealed increasing wage growth and portending rate cuts in the fourth quarter.

“But right now, at least, I’m not pricing in a recession for next year, but I do expect a slow growth environment in the US with the potential for recession risk, particularly outside of the US, that could open the door for rate cuts towards the end of next year.“

Indeed, some experts say it is too early to break out the champagne. Fed inflation metrics are still above the Fed’s 2% target and have declined less recently than earlier this year.