The US non-farm payroll data (NFP) data showed that the US economy added greater than expected jobs last month in December 2024. This has dwindled the chances of a Fed rate cut coming in March this year, which could further delay the chances of a BTC price rally to $200K this year.
Fed Rate Cuts Delayed To June 2025
Following December’s employment data, top market analysts stated that the stronger-than-expected jobs market is likely to have stick inflation going ahead which would prevent the Fed from announcing rate cuts soon.
The U.S. economy added 256,000 jobs in December, surpassing expectations of 164,000. On the other hand, the unemployment rate dropped to 4.1%, better than the projected 4.2%.
Goldman Sachs economists, led by Jan Hatzius, now anticipate Fed rate cuts in June and December 2025, as well as June 2026. This revises their earlier forecast of cuts in March, June, and September while maintaining their projection for a terminal rate of 3.5%-3.75%. According to a new report, Bank of America economists led by Aditya Bhave wrote:
“After a very strong December jobs report, we think the cutting cycle is over. The conversation should move to hikes”.
Economists Andrew Hollenhorst and Veronica Clark at Citigroup stated in a note that they are “not overly concerned about scenarios where the Fed refrains from cutting rates this year”. They added:
While employment “is holding up better than we had expected, price and wage inflation are both cooling and should have officials comfortable cutting even in a still-strong economy”.
BTC Price Recovery to See Delays?
Following the all-time highs in December last month, the Bitcoin price has continued to stay under selling pressure slipping under $95,000 levels. However, with the Fed rate cuts, analysts are concerned that it could further delay BTC price recovery from here amid the absence of fresh liquidity.
However, Bill Barhydt, founder of Abra Global, has forecasted the return of quantitative easing (QE) and looser bank balance sheet policies as necessary measures to address the 30-year U.S. Treasury bubble. In a statement, Barhydt asserted that upcoming Federal Reserve rate cuts alone will not be sufficient to tackle the issue.
“QE is coming. Fed rate reductions will not prick the 30-year Treasury bubble. Only QE and looser bank balance sheet policies will do that. Buckle up,” he said.
Furthermore, Wall Street analysts are confident of a Bitcoin price recovery along with the expansion of the global M2 money supply. With Donald Trump’s inauguration just 10 days from now, the crypto industry is also hoping for the Trump effect to kick in.
Bitcoin Chop Won’t Last Long
Crypto analyst IncomeSharks has suggested that Bitcoin’s current consolidation phase may be shorter and more bullish compared to previous cycles. “Just be lucky we don’t have to chop for 7 months this time,” the analyst noted. However, the analyst noted that the current 2 to 3 months of consolidation could lead to capitulation for many investors.
Despite this, IncomeSharks described the ongoing market movement as a “more bullish consolidation pattern than before,” signaling potential optimism for Bitcoin’s trajectory in the coming months.
Bhushan Akolkar
Bhushan is a FinTech enthusiast with a keen understanding of financial markets. His interest in economics and finance has led him to focus on emerging Blockchain technology and cryptocurrency markets. He is committed to continuous learning and stays motivated by sharing the knowledge he acquires. In his free time, Bhushan enjoys reading thriller fiction novels and occasionally explores his culinary skills.
Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
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