According to ING, the Fed’s Expected Rate Cut May Not Occur Until the Fourth Quarter.

ING forecasts that although the Federal Reserve is likely to delay interest rate cuts, the eventual easing may be more pronounced than previously anticipated.

Following Wednesday’s Federal Reserve meeting, the central bank decided to keep its benchmark interest rate at 4.25%-4.5%. During his press conference, Chairman Jerome Powell expressed growing concerns about the possibility of stagflation, as inflation and unemployment risks continue to rise.

Markets, including both traditional finance and cryptocurrencies, were closely scrutinizing Powell’s comments for hints of an imminent rate reduction, especially with the June meeting approaching. ING highlighted Powell’s remarks, including statements that “uncertainty about the economic outlook has increased” and “the risks of higher unemployment and higher inflation have risen,” which point to a cautious stance that could last for several meetings.

ING suggests that the Fed may be in a “wait-and-see” mode, refraining from action until there is greater clarity about the direction of the economy. This could delay rate cuts, but when the Fed finally moves, it could opt for a more aggressive reduction to make up for the delay. ING speculates that this wait-and-see approach could extend through the September meeting.

The investment bank also noted that the Fed’s reluctance to take action is likely due to concerns over global trade tensions and supply chain disruptions, which could drive inflation higher.

Meanwhile, Bitcoin has surged from $96,000 to $99,500 since the Fed’s announcement, buoyed by a potential trade deal with a major economy, which has helped improve market sentiment.