- Kevin Hassett advocates for a potential 50 basis point rate cut.
- Implications include enhanced liquidity and positive effects on crypto markets.
- Current futures market sentiment favors a 25 basis point cut.
On December 11, Kevin Hassett, Director of the White House National Economic Council, suggested that strong data could justify a 50 basis point Federal Reserve rate cut.
This has significant ramifications for macroeconomic liquidity and risk assets, including Bitcoin and Ethereum, as markets currently anticipate only a 25 basis point reduction.
Hassett Advocates for Deeper Rate Cuts Amid Strong Data
Kevin Hassett, during a Wall Street Journal CEO Council event, expressed confidence in the potential for more substantial Federal Reserve rate cuts. Hassett asserted that stronger economic data justify more aggressive monetary easing than the 25 basis points widely anticipated by the market.
The implications are notable: a shift from a 25 bps rate cut to a potential 50 bps cut could stimulate liquidity flows, directly impacting risk assets. However, current futures market sentiment indicates only an 89% probability for the former scenario.
Market reactions are closely monitored, with influential figures like Goldman Sachs CFO Denis Coleman projecting a 25 basis point cut this year, followed by a pause and further reductions in 2026. Neuberger Berman’s CIO noted the favorable conditions for risk assets if the Federal Reserve chooses an easing path.
Historical Rate Cut Patterns and Crypto Market Impact
Did you know? Historically, Federal Reserve rate cuts have often led to significant rallies in risk assets like Bitcoin and Ethereum, providing a buoyant environment for these volatile assets during times of monetary easing.
Bitcoin (BTC), with a current price of $92,234.18, holds a market capitalization of $1.84 trillion. It has experienced a 2.04% decline in 24 hours, and its trading volume stands at $55.51 billion, down by 14.45%. The cryptocurrency exhibits a 30-day decline of 12.86% with a circulating supply at 19.96 million, as CoinMarketCap data suggests.
Insights from Coincu’s research team suggest that a deeper than expected rate cut by the Federal Reserve might prompt renewed investor interest in the cryptocurrency sector, potentially revitalizing trading volumes and fostering a more bullish market sentiment in the long term.
| DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing. |
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