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Cryptocurrencies do not raise their heads and fears persist for the next steps of the Fed

Cryptocurrencies do not raise their heads and fears persist for the next steps of the Fed

The possible decision of the Fed to continue with the rate hike once again affected these risky assets, although there is still no consensus. Bitcoin operates below $27,000.

The cryptocurrencies they do not take off This Thursday, May 1, Bitcoin continues with losses of 0.6% in the last 24 hours, after falling below $27,000. For its part, Ethereum yields 0.7% and tries to consolidate US$1,850. In the rest of the market it operates with general falls of up to 3%.

The truth is that the leading cryptocurrency seems to continue the path taken in May, the pfirst month of 2023 that has resulted in losses after rebounding more than 60% between January and April. According to Mikkel Morch, Chairman of cryptocurrency investment fund ARK36, BTC has come under lower pressure from the latest comments from Cleveland Federal Reserve (Fed) President Loretta Mester.

Fed: there is still no consensus on a possible rate hike

“These observations have had a disruptive impact on various risk assets, including cryptocurrencies. Simultaneously, the discouraging manufacturing data release from China has added to the bearish sentiment surrounding bitcoin and other risky assets,” he explained.

The Cleveland Fed president wasn’t the only one to speak. Governor Philip Jefferson has indicated that a pause does not mean the end of the increases, while the president of the Philadelphia Fed, Patrick Harker, has been in favor of giving the market a breather. “If we are going to enter a period where we need to make more adjustments, we can do it every other meeting. We don’t have to do it in every meeting,” Harker said.

These comments only serve to highlight what the latest central bank minutes revealed: the division between members is evident and palpable and there are many possibilities that the Fed does not follow the planned road map. On the other hand, yesterday the Beige Book was published indicating that, between April and early May, “expectations for future growth deteriorated somewhat”, although in some districts of the country “they largely expected a greater expansion of activity ”. In addition, now the consensus expects, according to the CME FedWatch tool, a pause in the increases (68% probability) before a rise of 25 basis points (32%).

Source: Ambito

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