Bitcoin (BTC) tumbled below $93,000 in European hours, losing 1.6% on the day, as major investment banks reassessed their expectations for Federal Reserve (Fed) rate cuts following a hotter-than-expected US jobs report.
Investment banks such as Goldman Sachs and Bank of America (BofA) have reduced their bets on Fed rate cuts, with BofA now warning that risks are skewed in favor of a rate hike. The leading cryptocurrency by market value has surged over 50% since the first rate cut on September 18 but is facing increased pressure from stronger-than-expected economic data.
Goldman Sachs has pushed out its next interest rate cut to June, citing a decline in inflationary pressures. However, Bank of America believes that the cutting cycle may be over and expects the Fed to pause further rate cuts in 2025.
The jobs report showed nonfarm payrolls increased by 256,000 in December, exceeding expectations, and kept average hourly earnings below forecast. The results have prompted investment banks to scale back their bets on rate cuts and raise concerns about a potential interest rate hike.
Source: https://www.coindesk.com/markets/2025/01/13/bitcoin-under-pressure-as-goldman-trims-fed-rate-cut-expectations-bof-a-sees-potential-hike-after-blowout-jobs-report