Crypto Boom Soon? Major Banks Predict At Least 2 Rate Cuts After Weak Labor Data

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Ah, the crypto market, forever like a toddler with a sugar rush-one moment excited, the next moment crying for attention. The current scene? The possibility of the United States Federal Reserve cutting interest rates this year. This delightful prospect has sent the crypto market into a state of joyous anticipation, as if Jerome Powell himself were handing out free candy at the Jackson Hole party. A few days ago, a speech by our dear Fed Chairman lit up the market like a bonfire of hope. 🍬

But oh, how quickly the winds of change blow in this unpredictable world! On Friday, September 5, a release of weaker-than-expected Non-Farm Payroll (NFP) data sent a chill through the market, like a draft sneaking through the cracks in an old house. Yet, as always, the crypto world-ever the optimist-decided to see the glass half full. Maybe, just maybe, this bad news was actually good news! After all, weak job data might just be the ticket to those much-desired interest rate cuts. 🎢

Weak Labor Data Increases Likelihood Of Rate Cuts: Major Banks

Now, let us talk about this rather unsettling labor data, shall we? The US labor market seemed to stumble like a tired horse in August, adding only 22,000 jobs-well below the expected 75,000. Major banks, ever the financial fortune-tellers, have stepped up to tell us how this latest disappointment might actually shake things up at the Federal Open Market Committee (FOMC) meetings. Grab your popcorn, folks!

Bank of America, always a beacon of optimism (or is it a mirage?), has suddenly softened its stance on no interest rate cuts in 2025. In fact, they now predict the Fed will cut rates twice before the year ends. Yes, you heard it right-two cuts, each by a modest 25 basis points. Expect these little tidbits of joy to arrive in September and December. Can you feel the anticipation building? 🎉

Meanwhile, the big guns at Goldman Sachs are predicting a slightly more ambitious plan-three 25-basis-point cuts by the end of the year! The first one will come in September, followed by two more in October and November. The plot thickens… 👀

Let’s not forget Citigroup, who-back in June-already had their crystal ball polished and ready. Their forecast? Three cuts as well. But unlike Goldman Sachs, they’re sticking with their prediction that these rate cuts will happen in September, October, and December. Mark your calendars, my dear friends! 🗓️

How Successive Rate Cuts Could Catalyze Crypto Bull Run

Ah, the magic of low interest rates. They are like the fairy dust sprinkled on the market, making riskier assets like crypto sparkle with potential. With fixed-income assets growing less appealing, investors-those brave souls-tend to flock to riskier ventures. It’s like switching from a safe, warm bed to a trampoline-scary, yes, but thrilling too!

So, when interest rates drop, the world tends to grow a little more bullish, and crypto prices climb like a cat stuck on the roof. The lower the rates, the higher the risk appetite. This, dear readers, is why we often see crypto bull runs during such times. Higher interest rates? Well, those usually lead to a decline in crypto liquidity. Not so thrilling when the bed’s too warm, huh? 🛏️

Currently, the crypto market’s total capitalization stands at a modest $3.09 trillion, but with a slight dip of over 1% in the past 24 hours. Oh, what a rollercoaster ride it is! 🎢

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2025-09-06 18:29