Economic experts warn that the market might be underestimating the Fed's tightening potential
Blerina Uruci, the Chief U.S. Economist at T. Rowe Price, believes the market may still be undervaluing the risk that the Federal Reserve (Fed) maintains a hawkish stance longer than expected.
📊 Concerns:
• Middle Eastern conflicts dragging on longer than anticipated
• Oil prices continuing to rise
• The U.S. economy remaining resilient
• Pressure from import prices and energy costs could lead to more persistent inflation
👀 According to Uruci, the Fed might overlook short-term energy shocks, but if oil prices stay high for an extended period, this could impact inflation expectations, wages, and corporate pricing behavior.
📈 Her new forecasts:
• 45% chance the Fed holds rates steady for the next 12 months
• 35% chance the Fed continues to raise rates by late 2026 or early 2027
• Only a 20% chance the Fed cuts rates
⚠️ This outlook goes against the expectations of some investors who are betting on a monetary easing cycle. If the Fed continues to hold or raise interest rates, risk assets like stocks and crypto could face continued pressure in the near term.
#Fed #Bitcoin #Crypto $BTC