Economic forecast points towards a potential 0.5% interest rate reduction by the Federal Reserve in September, according to an executive at BlackRock, following a recent jobs report indicating a weaker-than-expected employment growth.
The U.S. Federal Reserve is expected to keep interest rates steady in the near term, with potential gradual reductions starting late 2025 or early 2026. This prediction comes from Rick Rieder, the chief investment officer of global fixed income at BlackRock, who made this statement in a note to clients.
According to the CME FedWatch Tool, there's an 80.3% chance the Fed will cut the federal target rate by 25 basis points at the Federal Open Market Committee (FOMC) meeting in September. However, the Tool also shows a low probability of a rate cut at the September 2025 meeting, implying rates will likely remain around the current 4.25%-4.50% range at least through the third quarter of 2025.
Rieder's comments reflect a broader market sentiment that the Fed will continue its current "pause" strategy, awaiting clearer signs of inflation declines before reducing rates. This view aligns with recent Fed communications and economic data.
The new labor report indicated that total nonfarm payroll employment increased by 73,000 jobs in July, less than the Dow Jones estimate of 100,000. The Fed Chair, Jerome Powell, said at a press conference this week that no decisions have been made about September's potential policy choices.
Meanwhile, in other news, a bank insider has been reported to have drained $195,000 from churches, kids museum, and customers, faking their own death to avoid recovery of incriminating evidence. The US Department of Justice is handling the case.
In the world of cryptocurrency, a crypto analytics firm has identified ancient Bitcoin (BTC) springing to life, potentially signaling sell-side pressure. A new altcoin, backed by Arthur Hayes, is outperforming the crypto market following a new partnership with Anchorage Digital.
Separately, US Lawmakers have issued subpoenas to JPMorgan Chase CEO Jamie Dimon and Bank of America Boss Brian Moynihan regarding their role in a Tesla supplier's IPO. The details of these events and their impact on the U.S. Federal Reserve's potential rate cut are not yet clear.
In summary, the current consensus, informed by Rieder's comments and CME FedWatch Tool data, is that the Fed will maintain the federal funds rate in the near term with potential slow and cautious reductions beginning late 2025 or into 2026, driven primarily by inflation trends and economic conditions. The impact of these events on other sectors such as NFTs, Blockchain, Regulators, Scams, Hacks & Breaches, Crypto Markets, Industry Announcements, and Ethereum is not yet clear.
- Despite the Fed's anticipated rate stability in the near future, the cryptocurrency market is seeing developments such as the reemergence of ancient Bitcoin (BTC) and the launch of a new altcoin, potentially indicating investor interest in alternative finance opportunities.
- As the Fed continues its "pause" strategy, focusing on inflation trends and economic conditions, the blockchain industry might also witness significant growth due to new partnerships, such as the one between the new altcoin and Anchorage Digital.
- During this time, businesses in various sectors, including NFTs and Regulators, should stay informed of the broader financial landscape shaped by institutions like the Fed, potential scams, and hacks, to make strategic and informed decisions for their investing activities.
