JPMorgan Strategist: Bitcoin Surge Could Stall Fed’s Rate Cut Plans

Crypto News- In a recent analysis, Marko Kolanovic, the chief market strategist at JPMorgan Chase & Co., cautioned about the exuberance in the market driven by the remarkable surge in Bitcoin’s price and speculative tech stocks. Kolanovic identifies this phenomenon as indicative of “froth,” where asset prices become detached from their intrinsic value due to excessive speculation.

While acknowledging the potential for these trends to persist, Kolanovic raises concerns about the Federal Reserve’s reluctance to cut rates amidst escalating asset prices and inflationary pressures. Lowering rates, he argues, could exacerbate inflation, prompting the Fed to reconsider its rate cut plans.

JPMorgan Strategist: Bitcoin Surge Could Stall Fed’s Rate Cut Plans

Kolanovic’s remarks come as Bitcoin surged to revisit the $69,000 mark earlier this week, setting a new all-time high of $70,000 today. The bullish momentum continues, with Bitcoin trading around $69,200 at the time of writing, marking an approximately 11% increase in the last 24 hours.

Federal Reserve Chair Jerome Powell echoed similar sentiments during a recent hearing with the Senate Banking Committee, emphasizing the Fed’s cautious approach towards adjusting monetary policies. Powell indicated that the Fed is closely monitoring inflation and aims to ensure its stability before considering any policy changes.

While Powell expressed openness to potential rate reductions later this year, he stressed the importance of conclusive evidence of inflation moving towards the Fed’s 2% target. The upcoming Federal Open Market Committee (FOMC) meeting scheduled for March 19-20 will be pivotal, with expectations for the Fed to maintain interest rates between 5.25% and 5.50%, aligning with its previous stance from January.