Bitcoin Seeks Support from Fed as Bank of America Predicts End of QT
Bitcoin's recovery is closely tied to the upcoming Federal Reserve (Fed) rate decision, scheduled for 18:00 UTC. The Fed is expected to maintain interest rates between 4.25% and 4.50%. Key points include:
- The potential end of the quantitative tightening (QT) program may positively impact market liquidity.
- The Fed has been reducing its balance sheet since June 2022, which had peaked at $9 trillion post-COVID.
- Market participants anticipate hints regarding QT during Chairman Jerome Powell's press conference.
- Traders on Polymarket predict a 100% chance of QT ending before May.
- Bank of America forecasts a pause in QT until the debt ceiling issue resolves, potentially lowering U.S. Treasury yields.
- Concerns about stagflation could arise from President Trump's trade tariffs, impacting economic growth and inflation projections.
Recent data indicates economic weakness, while inflation metrics are increasing, suggesting a possible shift in the Fed's economic outlook. Analysts expect lower GDP growth projections alongside higher inflation risks, which could affect Bitcoin's performance amid these developments.