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IMF: Global Central Banks to Cut Rates in Second Half

IMF: Global Central Banks to Cut Rates in Second Half

According to the IMF, global central banks will probably start reducing interest rates in the second half of this year.
In contrast to the IMF’s forecasts on international central banks, the Fed continues to use various economic data sources to determine whether to decrease interest rates.
Sometimes, government securities lose value due to lower interest rates; this makes alternative assets like Bitcoin more appealing.
According to the IMF, global central banks will probably start reducing interest rates in the second half of this year. The International Monetary Fund also forecasts that dropping and controlling inflation would support most global banks’ rate-cutting plans.

The second half will see rate cuts by global central banks.

According to Yahoo Finance, the International Monetary Fund released a new estimate that when inflation starts to decline, global central banks will begin to cut interest rates in the second half of the year.

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In its recently released World Economic Outlook report, the IMF predicted that healthy economic growth will persist. The IMF updated its January forecast for global growth to 3.2% this year, a tenth of a percent higher than anticipated.

The drop in the global inflation rate is driven by a decrease in “core inflation,” or the cost of goods minus volatile energy and food costs. Growing interest rates, declining job markets, and a break from increasing energy prices all contribute to this reduction.

US Fed Rate Curve Continues to Be Unpredictable

In contrast to the IMF’s forecasts on international central banks, the Fed continues using various economic data sources to guide its decision to reduce interest rates. The US economy beat market predictions of 200K and a downwardly revised 270K in February 2024, adding 303K new jobs in March 2024, the most in ten months.

From this, the economy is still strong. Relative to market predictions, the unemployment rate decreased from 3.9% to 3.8%. This demonstrates the robustness of the US labor market, which gives the Fed cover to lower interest rates and purchase more time. Market participants assumed that the Fed would try to cut rates in September rather than June due to the numbers.

What’s New in Cryptocurrency Markets?
In the past, investors have relied heavily on the Federal Reserve’s rate decisions when assessing assets. Sometimes, government securities lose value due to lower interest rates, making alternative assets like Bitcoin more appealing.

If the rate dropped quickly, the cryptocurrency markets would benefit from higher risk appetite and robust purchasing power. This may support the idea that there is still a Bitcoin boom.

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