Analyst: If the Fed cuts interest rates by 25 basis points, Bitcoin may resume its slow upward trend
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Citigroup: The case for raising interest rates has disappeared; the Fed is expected to resume rate cuts in October.
According to BlockBeats, on July 5th, Citigroup Research stated in its weekly US economic report released on July 2nd that the significantly weaker-than-expected US non-farm payroll data in June strongly refuted the necessity of raising interest rates. Citigroup believes that several factors previously supporting a hawkish stance, including rising oil prices, accelerating wage growth, and core PCE exceeding the target, have faded, and "the rationale for raising rates has disappeared." Data shows that US non-farm payrolls increased by only 57,000 in June, far below expectations, and the data for the previous two months was revised downward by a combined 74,000. After the revision, the average monthly increase in non-farm payrolls over the past three months fell to approximately 111,000, a significant drop from the pre-revision level of over 180,000. The unemployment rate fell from 4.296% to 4.189% in June, but Citigroup believes this was mainly due to the labor force participation rate falling from 61.8% to 61.5%. If the participation rate had remained unchanged, the actual unemployment rate would have risen to over 4.5%. Regarding inflation, Citigroup stated that multiple factors are collectively suppressing price pressures. Oil prices have fallen back to pre-conflict levels, and July CPI and PCE data are expected to show a month-on-month decline; further slowdown in housing rents will also drag down core CPI and core PCE. Furthermore, the revised core PCE methodology will adopt a more reasonable price adjustment method for AI-related goods. Citigroup estimates that the revised core PCE year-on-year growth rate may be lowered by 20 to 30 basis points, and will be officially reflected in September. Citigroup maintains its baseline forecast, expecting the Federal Reserve to hold rates steady at the July and September FOMC meetings, cut rates by 25 basis points for the first time at the October 28 meeting, and then cut rates by another 25 basis points in December, bringing the federal funds rate range down to 3.0% to 3.25% by the end of the year. Citigroup also expects the Federal Reserve to cut rates three more times in 2027, with a terminal interest rate range of 2.75% to 3.0%.
Analysts: The Federal Reserve may have to raise interest rates in September.
According to Mars Finance, on July 3rd, Allianz Chief Economist Ludovic Subran stated, "The US non-farm payroll data was actually weak, but I still believe the inflation rate will peak above 3.7%, and artificial intelligence, fiscal stimulus, and the energy industry are still supporting economic growth. The Fed may have to raise interest rates in September. I think this is the real point of contention between the US and Europe." Subran believes that the European Central Bank will not take further action after last month's rate hike. "That was an insurance-style rate hike, but judging from the current data, it seems to be over," he said. "The traumatic effects of the (Iranian) war will take time to manifest; the economy is still bearing the costs of the war, but the situation is much better now than it was a few weeks ago." (Jinshi)
The probability of the Federal Reserve keeping interest rates unchanged in July is 73.3%, and the probability of a rate hike in September is 52.7%.
According to ChainCatcher, citing Jinshi, CME's "FedWatch" shows that the probability of the Federal Reserve keeping interest rates unchanged in July is 73.3%, and the probability of a cumulative 25 basis point rate hike is 26.7%. By September, the probability of keeping interest rates unchanged is 32.4%, the probability of a cumulative 25 basis point rate hike is 52.7%, and the probability of a cumulative 50 basis point rate hike is 14.9%.
The probability of the Federal Reserve keeping interest rates unchanged in July is 74.3%, and the probability of a rate hike in September is 46.2%.
According to ChainCatcher, citing Jinshi, CME's "FedWatch" shows that the probability of the Federal Reserve keeping interest rates unchanged in July is 74.3%, and the probability of a cumulative 25 basis point rate hike is 25.7%. By September, the probability of keeping interest rates unchanged is 42.9%, the probability of a cumulative 25 basis point rate hike is 46.2%, and the probability of a cumulative 50 basis point rate hike is 10.8%.
Analysts: Bitcoin futures premium and open interest index both turned positive, indicating a recovery in leverage demand.
PANews reported on July 6th that CryptoQuant analyst Axel Adler Jr. released a report indicating signs of improvement in the Bitcoin futures market: futures prices are higher than spot prices for the first time in a month, and the basis returned to positive territory in early July after hitting a low of -0.40% in the third week of June; the 30-day moving average of the open interest index has also turned positive, reflecting a surge in long positions over the past few days and a return of risk appetite. However, the analyst stated that the improvement in both indicators is still relatively shallow—the premium is only slightly above zero, and the open interest index has shown signs of cooling in the last two days. The current state is closer to normalization than a trend reversal, and a sustained positive basis and positive open interest are needed to confirm a shift in the market pattern. The main risk lies in the failure of the early return of leveraged demand to be sustained, which could instead trigger a new round of market consolidation.
The probability of the Federal Reserve keeping interest rates unchanged in July is 77%, and the probability of a rate hike in September is 47.6%.
According to ChainCatcher, citing Jinshi, CME's "FedWatch" shows that the probability of the Federal Reserve keeping interest rates unchanged in July is 77%, and the probability of a cumulative 25 basis point rate hike is 23%. By September, the probability of keeping interest rates unchanged is 41.9%, the probability of a cumulative 25 basis point rate hike is 47.6%, and the probability of a cumulative 50 basis point rate hike is 10.5%.