Gold advocate economist Peter Schiff expects interest rate cuts! Will Bitcoin and Solana usher in a new wave of market trends?

The U.S. economy faces a dual challenge of inflation and the employment market. According to the latest data, the CPI rose 0.4% in August, exceeding expectations, with an annual inflation rate reaching 5%. However, despite rising inflationary pressures, another market focus is the significant increase in the number of unemployment claims. According to the latest report, the number of people applying for unemployment benefits surged to 263,000, the highest level since October 2021. This article is an excerpt from the Forward Guidance newsletter by author Ben Strack, providing a comprehensive analysis of the latest U.S. economic data and market reactions, particularly regarding the fluctuations in the consumer price index (CPI) and the number of unemployment claims, as well as the potential impacts of these factors on The Federal Reserve (FED) policy and the prices of Crypto Assets such as Bitcoin and Solana.

Gold economist Peter Schiff: The Fed will push for interest rate cuts.

Gold economist Peter Schiff analyzed that due to the rising unemployment rate, the Federal Reserve will have to ignore the impact of rising inflation and is highly likely to adopt interest rate cuts. He emphasized that although inflation data shows there is still upward pressure on prices, the unemployment issue may force the Fed towards a more dovish monetary policy, further promoting interest rate cuts. This decision will lead the economy into a state of stagflation.

Lowering interest rates may increase the value of risk assets.

With the release of the August CPI data, the market's focus on the Federal Reserve's meeting next week has shifted to the issue of the interest rate cut magnitude. According to CME Group's FedWatch tool, the market currently expects the Federal Reserve to announce a decision to cut rates by 25 basis points at next week's meeting, while the previous probability for a rate cut was only 14%.

The increase in expectations for interest rate cuts not only reflects the market's concerns about economic slowdown but also supports the prices of risk assets. David Hernandez, a cryptocurrency investment expert at 21Shares, believes that recent CPI and Producer Price Index (PPI) data show that inflationary pressures have eased, which strengthens market expectations that the Federal Reserve will cut interest rates, potentially further boosting the value of risk assets, including crypto assets.

The impact of interest rate cuts on the Bitcoin and Solana Crypto Assets markets

In addition to CPI and PPI data, changes in unemployment data have also sparked attention in the Bitcoin market. David Hernandez noted that the next key technical level for Bitcoin BTC is currently around $115,000, and market volatility may further intensify, especially in the case of interest rate cuts by The Federal Reserve (FED). As the prices of risk assets rise, more investors may turn their attention to Bitcoin and other Crypto Assets.

The expectation of interest rate cuts provides more opportunities for risk-seeking investors and may further drive up the prices of Crypto Assets, including Bitcoin, Solana, and XRP. According to analysis from 21Shares, ETFs for tokens like Solana (SOL) and XRP are expected to be listed this fall, a development that could bring more market follow for these assets.

The growth potential of Solana

According to data from Blockworks Research, corporate purchases of Solana have surged. While these acquisitions are relatively small in scale, their frequency is steadily increasing. Matt Hougan, Chief Investment Officer of Bitwise, noted in his latest memo that supporters of Solana believe its blockchain has the potential for the tokenization of major assets globally, and its speed is sufficient to support efficient transactions. The U.S. Securities and Exchange Commission (SEC) is also set to rule on several U.S. Solana ETF proposals by October 10, a decision that will impact the future value direction of Solana. As inflationary pressures and unemployment issues intertwine, expectations for interest rate cuts by the Federal Reserve (FED) have become a focal point for the market. Cryptocurrencies like Bitcoin and Solana may see new market opportunities in a rate-cutting environment. Investors should closely follow the upcoming Federal Reserve (FED) decisions and market trends for crypto assets such as Solana, as these factors will significantly influence market sentiment in the coming months. Purely market observations, not any investment advice.

This article features gold advocate economist Peter Schiff predicting interest rate cuts! Will Bitcoin and Solana usher in a new wave of market trends? Originally appeared in Chain News ABMedia.