Nomura, a global leader in financial services, believes the Federal Reserve has completed its interest rate rises and may possibly decrease rates at its meeting next week.
Bloomberg reported Nomura economists Aichi Amemiya and Jacob Meyer as stating in a private letter this week, “In response to imminent financial stability issues, we now expect the Fed to decrease interest rates.”
Nomura predicts a Fed rate cut and the end of tapering this month – What Does This Mean for Cryptocurrency?
The two analysts stated that they also anticipate the Federal Reserve to “end quantitative tightening” and that this should assist banks in maintaining reserves.
The opinions of the Nomura economists follow the failure of a number of crypto and tech-related institutions in the United States last week and over the weekend. Signature Bank, a crypto-friendly institution, failed mere days after Silvergate Bank and Silicon Valley Bank (SVB).
Notwithstanding efforts taken by federal authorities and pledges that all depositors would be compensated in full, shares of several of America’s top banks have plummeted dramatically in the wake of the catastrophes.
For cryptocurrencies, however, the bank failures have had the opposite impact, with the prices of the majority of major cryptocurrencies rising as the case for more rate rises has diminished.
Keeping in mind Bitcoin’s response to the greater chance of a halt in rate hikes, the prospect of a rate drop as early as next week might provide further gasoline for the surge.
Bitcoin (BTC) rose 16% to $26,000 in the previous week, while Ethereum (ETH) rose roughly 13% to $1,770 at the time of writing.
According to Amemiya and Meyer of Nomura, conventional financial markets now view the government’s initiatives as “insufficient,” given the decrease un share prices of financial services companies.
The economists added, “It is feasible that the Fed would construct a new lending facility by expanding the eligibility of collateral assets or by expanding access for borrowers through an emergency loan facility.”
