Financial services giant Nomura now believes that the Federal Reserve has hiked interest rates and may also cut rates at next week’s meeting.
“In response to rising risks to financial stability, we now expect the Fed to cut rates,” said Nomura economists Aichi Amemiya and Jakob Mayer. Cited said in a private note by Bloomberg this week.
Both economists said they also expect the Fed to “stop the quantitative tightening” and said this would help banks hold reserves.
The comments from economists at Nomura come after a series of banks related to the crypto and tech industry in the US over the past week and weekend. on Sunday, Crypto-friendly Signature Bank collapsesWhereas Silvergate Bank And Silicon Valley Bank (SVB) Both fell before the weekend.
Despite actions from federal regulators and assurances that all depositors would be made whole, shares of many of America’s largest banks fell sharply after the collapse. For crypto, however, bank failures have so far had the opposite effect, with prices of most major cryptocurrencies rising, weakening the case for further increases.
And with the reaction taking into account the possibility of an increase in bitcoin rate hikes, the prospect of a cut as early as next week could potentially add further fuel to the rally.
Alone in the last 7 days, bitcoin (btc) 16% to $26,000, while Ethereum (ETH) It was up about 13% to $1,770 at the time of writing.
According to Nomura’s Amemiya and Mayer, traditional financial markets currently view the actions taken by the government as “inadequate”, given the fall in share prices of financial services firms.
“It is possible that the Fed could create a new lending facility by providing wider eligibility for collateralized assets or wider access to borrowers through the Emergency Lending Facility,” the economists wrote.