While the leading cryptocurrency Bitcoin has been trading in a sideways range between $60,000 and $65,000 for some time, investors in the crypto market are now focused on macroeconomic events that could determine the direction of Bitcoin's movement.
While macroeconomic events are currently under close scrutiny, Goldman Sachs chief economist Jan Hatzius provided a notable assessment of the Fed's activities.
The Goldman Sachs economist stated that the probability of the Federal Reserve raising interest rates in September is very low, which could positively impact Bitcoin.
Hatzius said that recently published weak economic data and slowing inflation have made it difficult for the Fed to raise interest rates again.
Markets Judge Fed Policy as Too Tight!
According to Jan Hatzius's assessment, sent to clients, the weakening of US retail sales, declining employment figures, and inflation significantly reduce the probability of the Fed raising interest rates in September.
At this point, Hatzius noted that given current economic prospects, inflation is more likely to continue decreasing rather than worsening until the end of the year.
The economist stated that markets still judge the trajectory of the Fed's interest rates as excessively tight at the moment.
What Does This Mean for Bitcoin?
The Goldman Sachs economist notes that reduced concerns about further Fed rate hikes could improve market liquidity, which, in turn, could positively affect risky assets, including Bitcoin.
However, Hatzius's statement does not imply a direct bullish forecast for the Bitcoin price.
Hatzius's assessment of $BTC is based on the expectation that 'the Federal Reserve will be less hawkish → the probability of rate hikes will decrease → which will create a more favorable environment for $BTC from a liquidity/risk appetite perspective.'
How do markets assess the prospects for a rate hike in September?
According to CME FedWatch data, markets estimate the probability of the Fed raising interest rates by 25 basis points at the September meeting at approximately 30.6%.
In contrast, the probability of keeping interest rates at their current level is approximately 69.4%. At the moment, the market is closely monitoring economic data from the US and statements from Federal Reserve officials.
*This is not investment advice.
