Bostic and Schmid dey urge make pipo dey careful about Fed rate cut wey dem wan do for September
Two Federal Reserve officials, Atlanta Fed President Raphael Bostic and Kansas City Fed President Jeffrey Schmid, don issue simultaneous warnings say make dem no rush cut Fed rate for September. For separate events, Bostic talk say him still expect one Fed rate cut dis year but e stress say the current 4.25%–4.50% policy rate still just small small restrictive and say inflation dey run well above the 2% target. E note say him outlook fit change if new economic data come. Schmid, for Jackson Hole symposium, also talk say make dem reason am well, say inflation near 3% and labor market still solid. E no too sure if dem suppose cut rate for September without ‘‘very definitive data’’ and warn say if dem act too fast e fit bring risks. Market expectation for September rate cut don fall from nearly 100% to about 81%. Traders go focus on incoming data for inflation and employment before September meeting to check the chance and time for Fed rate cut.
Bearish
Di wayi Fed dey cautious plus dem don reduce di chance say dem go cut rate for September mean say interest rates fit stay high for longer time. High rates dey usually suppress risk assets like cryptocurrencies because e go increase borrowing cost and reduce liquidity. Similar tins like wetin happen for 2022 when Fed take hawkish stance don show say e fit cause crypto market pullback. For short term, traders fit dey bearish as dem dey adjust to di lower chance of rate cut. For long term, one cut still dey expected dis year, wey fit support di market once strong data show am, make di outlook less negative after di next Fed meeting.