Fed Signals Pivot to Easier Policy, Rate Cuts in 2023; Markets Rally, Bitcoin Price Could Reach $60k
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Fed chair Jerome Powell signaled the Fed is openly discussing rate cuts in 2023 and cutting before inflation reaches 2%, a pivot from previous hawkish stance.
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Markets reacted strongly to Powell's comments, with yields declining, dollar weaker, equities and commodities up on expectation of easier Fed policy.
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Forecast changed from 50bps of cuts in 2023 to at least 75bps of cuts, front-loaded early in the year, partly due to election year dynamics.
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Analysts expect at least 3 rate cuts in 2023 now, totalling around 100bps according to Emmons.
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Lower rates positive for crypto prices; could push Bitcoin back to $50-60k level. Approval of Bitcoin spot ETF could further boost prices.