Barclays warns: Fed Kan Cryptomarkt rock hard

Investors count en masse that the Federal Reserve (FED) will lower interest in September. According to the British bank giant Barclays, that is far too optimistic. The bank warns that the market a painful surprise is waiting for the US central bank holding foot.

Labor market figures and inflation feed hope

The financial markets were increasingly counting on an interest rate reduction at the beginning of August. The reason was the disappointing job report from the United States. In July only 73,000 jobs were added, while economists had counted on 115,000. Moreover, earlier figures were considerably adjusted downwards, so that a total of 258,000 jobs disappeared from the statistics.

The inflation figures also contributed to optimism. The consumer price index (CPI), which shows how much prices for households are rising, was lower than analysts had predicted. That fed the expectation that the Fed would see space to lower the interest.

A lower interest rate means borrow cheaper and more liquidity in the market. That capital often flows towards risky investments such as shares and Bitcoin (BTC). The chance of an interest rate reduction in September even rose to 94.6 percent, after which the Bitcoin Koers reached a new all-time high.

New inflation morning push cryptomarkt down

However, optimism got a blow after the publication of the producer price index (PPI). Those figures, which indicate how many companies pay for their products, were higher than expected. This indicates increasing inflation and reduces the chance that the FED will lower interest in September.

The cryptomarkt responded immediately. Bitcoin, Ethereum (ETH) and other Altcoins gave their earlier profits full prize. Nevertheless, the expected chance of an interest rate reduced but light, from 94.6 to 92.1 percent.

Barclays: ‘Market underestimates the Fed’

According to Barclays, even that expectation is still much too high. The bank states that investors underestimate the power of the American labor market and the tenacity of FED chairman Powell.

If the Central Bank decides to reduce interest in September, it can lead to a new crash on the stock markets and in the cryptomarkt. For the Bitcoin course and other digital currency, there is again significant pressure.