Wall Street Anticipates Rate Cuts as Crypto Markets Poised for Gains

Market sentiment is shifting as inflation cools and expectations of Federal Reserve rate cuts grow. Cryptocurrencies, often sensitive to monetary policy shifts, could emerge as primary beneficiaries of a looser financial environment. Goldman Sachs projects the first cut as early as September, while prediction markets assign a 40% probability to two reductions by year-end.

Former President TRUMP has intensified pressure on the Fed, demanding aggressive rate cuts to 1% and accusing Chair Powell of political motivations. This rhetoric contrasts with Powell's stated commitment to maintaining rates amid lingering inflation concerns, despite December's contradictory cut under similar conditions.

Inflation expectations have plummeted remarkably, with one-year consumer outlooks dropping 2.2 percentage points in two months—among the steepest declines on record. Five-year projections show similar easing, creating fertile ground for risk assets.