JPMorgan: Bitcoin’s record gains may postpone US interest rate cuts

JPMorgan believes that the record rise in Bitcoin may push the US Federal Reserve to postpone planned interest cuts later this year.

According to Marko Kolanovic J. Morgan’s strategic analyst, Bitcoin’s crossing of the $60,000 barrier, along with record highs for stocks, indicates that there is a prelude to a bubble that has begun to accumulate in risky assets.

Kolanovic stressed that this bubble may eventually lead the Fed to postpone planned interest rate cuts, which are often stimulating for risky assets, because they may unleash new highs in inflation.

The analyst added: This may lead to keeping monetary policy tight for a longer period, as premature interest cuts threaten to inflate asset prices further or cause another rise in inflation.

Bitcoin crossed the $69,000 barrier this week and recorded its highest level ever, and these rises coincided with record gains on Wall Street.

US Federal Reserve Chairman Jerome Powell said this week that the central bank is not far from gaining sufficient confidence that inflation is declining, paving the way for it to begin reducing interest rates.

While most of the stock market’s gains since October have been led by expectations of curbing inflation and lower interest rates, further delays in the start of rate cuts could hamper a bullish stock market.