Interest rate cuts are a bullish catalyst for crypto prices, as investors increase their risk appetite during times of credit expansion.
Several financial institutions and market analysts are now projecting the US Federal Reserve, the country’s central bank, will slash interest rates from the current target rate of 4.25%-4.5% at least twice in 2025.
The banking forecasts followed a weak August jobs report that saw only 22,000 jobs added for the month, versus expectations of about 75,000.
Analysts at Bank of America, a banking and financial services company, reversed their long-held stance of no rate cuts in 2025 and are now projecting two 25 basis point (BPS) cuts, one in September and another in December, according to Bloomberg.
