Analysis: If the Fed meeting hints at only one rate cut in 2025, it may put pressure on risky assets such as Bitcoin
PANews reported on June 18 that QCP Capital, a crypto investment institution in Singapore, said that the conflict between Israel and Iran has entered its sixth day, and the two sides continue to exchange missiles, and the prospects for a diplomatic solution are bleak. G7 leaders have repeatedly called on Iran to return to nuclear negotiations with the United States, and the talks originally scheduled for this Sunday may be difficult to hold. The market is concerned about the impact of the reorganization of the power structure in the Middle East and the proxy game between the United States, Russia and China. The Strait of Hormuz has become the focus. If Iran is forced into a desperate situation, it may block this major global crude oil transportation route, triggering supply shocks and inflation risks. President Trump has strongly demanded that Iran "surrender unconditionally", and the market generally expects that Iran may partially or fully succumb, but the situation remains highly uncertain.
Against the backdrop of geopolitical conflicts and rising inflationary pressures, the Federal Reserve faces a complex situation when it meets tonight. The market is currently pricing in two rate cuts in 2025 and two more in 2026, but QCP Asia expects the Fed to take a more cautious tone in its Summary of Economic Projections (SEP), possibly suggesting only one rate cut in 2025, which is in contrast to market expectations. If the Fed makes such an adjustment, it may put pressure on risky assets, including Bitcoin and a wider range of digital assets, due to lower liquidity expectations.
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