News View Non-AMP

Bank of America Predicts 6% Fed Funds Rate as an Inflation-Cooling Measure

Published by
Qadir AK

In an unexpected turn of events, Bank of America (BoA) made a bold prediction regarding the trajectory of the Federal Reserve (Fed) interest rates. BoA strategist Michael Hartnett suggests that the Fed may need to raise interest rates up to 6% to effectively curb inflation, despite a predicted pause on rate hikes in June.

A Hawkish Pause or a Rate Hike?

While many are eagerly awaiting the Fed’s Summary of Economic Projections for the year-end, Hartnett has gone on record to say that the report will likely predict lower-than-expected unemployment and a Personal Consumption Expenditure (PCE) Index of 4.5% and 3.6%. This comes despite marginally slower job growth last month.

Interestingly, the bank’s preferred inflation gauge, the PCE, has been relatively steady, averaging at 4.3% over the past three months. Despite this, speculation continues to surround the possibility of a significant rate hike in the near future.

What Does This Mean for Investors?

The ramifications of this prediction are far-reaching, especially for companies that are already grappling with economic headwinds. For instance, Coinbase, the largest cryptocurrency exchange in the US, is currently embroiled in a legal battle with the US Securities and Exchange Commission over alleged violations related to unregistered securities offerings.

If Hartnett’s prediction comes true and the interest rates soar to 6%, companies like Coinbase might find their investors jumping ship, causing their stock prices to nosedive. This could lead to a domino effect, impacting various sectors across the economy.

Bitcoin’s Fate Tied to the Fed?

The cryptocurrency market is also keeping a keen eye on the Fed’s moves. Antoni Trenchev, CEO of crypto financial services firm Nexo, believes that Bitcoin’s trajectory could mirror equities once the Fed’s Summary of Economic Projections is released.

Interestingly, the SEC’s lawsuit against Coinbase did not mention any Bitcoin-related products violating US law. This news, along with Bitcoin’s recovery to above $26,000 after last week’s lawsuit, has buoyed the crypto community’s spirits.

Will the Fed really push the rates up to 6% to curb inflation? Or will it stick to a more cautious approach?

Will companies like Coinbase be able to weather the storm if the interest rates shoot up? How will this affect the broader economy? 

And what about Bitcoin? Will it continue its recovery, or will the Fed’s decision send it spiraling down again? The coming months are set to be a fascinating period in the world of finance. 

Also Read – Binance’s Billion-Dollar Blunder: Are Criminal Charges Imminent?

Qadir AK

Qadir Ak is the founder of Coinpedia. He has over a decade of experience writing about technology and has been covering the blockchain and cryptocurrency space since 2010. He has also interviewed a few prominent experts within the cryptocurrency space.

Recent Posts

Uniswap (UNI) Price Set for 30% Surge? Key Levels to Watch

UNI, Uniswap's native token, appears bullish and is poised for massive upside momentum after a…

April 2, 2025

M2 Money Supply vs. Global Liquidity: Don’t Get Mistaken!

The crypto market is always shifting based on global money trends, but a new debate…

April 1, 2025

XRP’s Worst-Case Scenario Could See a Drop to $0.30

XRP holders are finding themselves at a crossroads as recent market trends raise questions about…

April 1, 2025

Bitcoin’s Price Dropped by 5%—Experts are Seizing the Moment: RUVI AI’s Token Presale Launching in a few Hours

Bitcoin, the flagship cryptocurrency, has taken a hit with a 5% drop in its price.…

April 1, 2025

Will Dogecoin (DOGE) Crash or Skyrocket?: Data

Amid market uncertainty, Dogecoin (DOGE), a popular and the world’s largest crypto meme coin, appears…

April 1, 2025

Should Shiba Inu (SHIB) & Dogecoin (DOGE) Be Worried? Panshibi (SHIBI) Emerges As Best New Investment Pick This Easter!

According to historical footprints in the global crypto market, festive seasons are always important for…

April 1, 2025