The Fed is not considering interest rate cuts yet this year what does this mean for crypto

Federal Reserve Governor Michelle W. Bowman recently announced that it is too early to consider an interest rate cut for 2024.
This statement comes at a time when both traditional and cryptocurrency markets are highly sensitive. Expectations for key economic data to be released later this week further reinforce this situation.
Bowman emphasized in the statement that while the United States has made some progress in managing inflation, the inflation rate remains high and faces various risks. This position is consistent with the Federal Reserve’s cautious monetary policy stance in uncertain economic environments. She also stressed the importance of the Federal Reserve maintaining independence and a non-political stance in the decision-making process.
These remarks were made prior to the second revision of the US first quarter GDP data, which is set to be released on Thursday, July 27. US Personal Consumption Expenditures (PCE) data is expected to be released on Friday.
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Bowman pointed out: “However, given that the average core consumer price inflation rate as of 3.8 months this year is 3%, I expect the inflation rate to remain high for a while.”
She also hinted at the possibility of deviating from global monetary policy trends.
Bear market trend in the cryptocurrency market
The Federal Reserve’s monetary policy is putting pressure on market conditions, including the cryptocurrency market. Higher interest rates typically strengthen the US dollar, thereby reducing the prices of assets including cryptocurrencies. Conversely, lower interest rates typically encourage asset price increases as investors seek higher returns in riskier markets.
Bowman claims that it is unlikely for interest rates to be cut before 2025, indicating that borrowing costs will remain relatively high, potentially hindering investment inflows into the cryptocurrency market. This situation may exacerbate the recent cryptocurrency crash, as investors may prefer safer and more profitable assets rather than unstable cryptocurrencies.
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Recently, the cryptocurrency market has been in turmoil.
Bitcoin (BTC)
Recently, due to a large amount of selling, its price fell below $59,000. Factors contributing to this situation include recent BTC sales, the German government’s expectation to pay $9 billion to Mt. Gox investors, which further worsened market sentiment.
However, the lack of expected interest rate cuts has heightened concerns about long-term market volatility. As traditional financial conditions tighten, interest in higher-risk assets such as cryptocurrencies tends to diminish.