ING States the Fed’s Likely Rate Cut May Not Happen Before the Fourth Quarter.

ING warns that although the Federal Reserve is likely to delay cutting interest rates in the near term, once they do make a move, the cuts could be more forceful than anticipated.

On Wednesday, the Federal Reserve announced it would maintain its current interest rate range of 4.25% to 4.5%. In his press conference, Chairman Jerome Powell raised concerns about the risk of stagflation, citing rising inflation and unemployment as growing challenges for the U.S. economy.

Both traditional financial markets and cryptocurrencies had been closely watching Powell’s statements for signs of an imminent rate cut. ING pointed to Powell’s comments that “uncertainty about the economic outlook has increased” and that “the risks of higher unemployment and higher inflation have risen,” indicating that the Fed is in no hurry to adjust rates.

ING suggests that the Fed is adopting a “wait-and-see” approach, which could mean that rate cuts may be delayed until there is more certainty about the economic direction. However, once the Fed has a clearer view, it could implement cuts more aggressively than expected, compensating for the delay. ING speculates that this cautious stance may extend through September.

The delay in action is likely due to the Fed’s concerns about trade wars and disruptions in global supply chains, which could exacerbate inflationary pressures and complicate the economic recovery.

Following the Fed’s decision, Bitcoin saw a notable rally, climbing from $96,000 to $99,500. The market was buoyed by President Donald Trump’s comments suggesting a possible trade deal with a major global economy, which helped restore investor confidence and risk appetite.