Economists at Pantheon, a US-based economic research firm, predict that the Fed will cut interest rates much more aggressively than expected.

In the latest note published on the subject, it was predicted that the US central bank will cut interest rates by 25 basis points in September, followed by rate cuts twice as large (50 basis points) in November and December. Economists emphasized that these cuts would be much more aggressive than the market and Fed officials had expected.

Pantheon argued that new data releases will show that the acceleration in the first quarter was an anomaly and that the disinflation trend will continue. The note also included the expectation of a strong rally in Treasury bonds.

How will the rate cut affect Bitcoin and other cryptocurrencies?

When interest rates fall, investors often seek higher returns and turn to riskier assets. Bitcoin and other cryptocurrencies are considered a risky asset due to their high return potential and volatility. Therefore, Fed rate cuts are expected to increase investor interest in cryptocurrencies.