Key Forecasts and Market Expectations
Jussi Hiljanen of SEB Research forecasts a decline in the 10-year US Treasury yield to 3.8%-3.9% in 3-6 months if rate cut expectations persist. This potential yield decline is significant as it may influence cryptocurrency markets, traditionally impacted by shifts in US monetary policy towards lower risk-free rates.
The Federal Reserve's Policy Shift
The Federal Reserve's decision to conclude the reduction of its securities holdings marks a significant shift in monetary policy. The decision follows a series of expectations regarding the Fed's potential interest rate actions as previously stated by Jussi Hiljanen, Chief Strategist at SEB Research. "If interest rate cut expectations persist, the 10-year US Treasury yield may decline to 3.8%-3.9% in three to six months," Hiljanen noted.
The Federal Reserve has announced its monetary policy update that includes the early conclusion of QT, accentuating a policy shift riveted on liquidity adjustments.
Market watchers and industry experts express anticipation for favorable yield changes. Hiljanen highlighted that lower hedge costs for international funds might positively impact the global bond market. The immediate response from financial analysts indicates a possible strategic shift in portfolio management practices as the market adjusts to the altered monetary stance.
Treasury Yield Dynamics and Historical Context
During past Fed policy shifts, key interest rate adjustments have historically influenced asset flows towards riskier ventures, including cryptocurrency markets, highlighting a potential impact despite recent data showing muted crypto responses.
Bitcoin Performance and Market Analysis
CoinMarketCap reports that Bitcoin (BTC) is currently priced at $101,911.27 with a market cap of $2.03 trillion. The 24-hour trading volume reached $69.91 billion, experiencing a 17.07% increase. Over 90 days, BTC has declined by 12.75%, reflecting its sensitivity to broader financial market trends.
Insights from the Coincu research team suggest possible adjustments in market perceptions as traders adapt to the end of QT. With historical tendencies towards risk layers, blockchain projects could experience shifts, although detailed analytics on current responses remain under review.