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What Happens to Bitcoin if Bank of America's 'Three Conditions' for Fed Rate Hikes Hit?
$BTC

Analysts acknowledged that Bitcoin would likely face pressure if the Fed hikes rates, but they highlighted the asset’s recent resilience

While Bank of America economists still view rate cuts as the most likely path, they outlined how surging energy costs could force the Federal Reserve to hike.

Beyond oil, rising shipping costs for fertilizer and aluminium threaten to spark broader price pressures in the U.S. economy, they noted.

Experts warned that a surprise rate hike would initially pressure crypto and stocks, but the digital asset could later thrive as currency debasement hedge like gold.

U.S. President Donald Trump is putting intense pressure on the Federal Reserve to lower its benchmark interest rate. But as his war in Iran presses toward its fourth week, Bank of America economists raised the prospect of a policy move on Friday that’s in the opposite direction.

Although the group still views cuts as more likely than hikes, it outlined conditions under which the U.S. central bank would likely determine that tighter monetary policy is appropriate, amid surging energy costs and no end in sight to the conflict rattling the Middle East.

The economists wrote in a note that the likelihood of a hike would increase if Fed Chair Jerome Powell’s tenure at the central bank’s helm runs longer than expected, the unemployment rate remains below 4.5%, and price pressures from higher energy costs spread to other parts of the economy.

The assessment came as Bitcoin changed hands below $70,000, according to CoinGecko. Earlier this week, the digital asset touched a 45-day high of $75,600, after dropping as low as $63,000 on the day that the U.S.-Israel war with Iran broke out.
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