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Much-Awaited Fed Rate Cut May Not Come Before Q4, ING Says
Delayed rate cuts could be more aggressive when they happen, the investment bank said.
May 8, 2025, 1:19 p.m.
What to know:
- The Federal Reserve on Wednesday held the benchmark interest rate between 4.25% and 4.5%, with no immediate plan to cut rates.
- Fed Chair Jerome Powell highlighted increased economic uncertainty and risks of higher unemployment and inflation.
- ING suggests that the Fed's cautious approach may delay rate cuts, which could be more aggressive when they occur.
The Federal Reserve may not cut interest rates any time soon, but when it does, the easing could be aggressive, according to Dutch investment bank ING.
On Wednesday, the Fed kept the benchmark rate on hold between 4.25% and 4.5%, with Chairman Jerome Powell raising the specter of stagflation during the press conference following the announcement.
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Both crypto and traditional markets looked to Powell for cues on a potential rate cut in June. ING points to his comments that "uncertainty about the economic outlook has increased" and the "risks of higher unemployment and higher inflation have risen" as evidence the wait-and-watch mode could last for a couple more meetings.
The comments suggest "little inclination to move until they are confident of the direction the data is heading, meaning rate cuts could be delayed, but risk being sharper when they come," ING said in a note to clients.
The investment bank said the wait-and-see stance could "persist through to September."
The bank the Fed's reticence to act is probably due to concerns that trade war and supply disruptions at ports and logistics firms could amplify inflation.
Bitcoin has rallied from $96,000 to $99,5000 since Wednesday's Fed decision, with President Donald Trump's tease of a trade deal with a major economy helping restore the risk sentiment.
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What to know:
- As of October 2025, GoPlus has generated $4.7M in total revenue across its product lines. The GoPlus App is the primary revenue driver, contributing $2.5M (approx. 53%), followed by the SafeToken Protocol at $1.7M.
- GoPlus Intelligence's Token Security API averaged 717 million monthly calls year-to-date in 2025 , with a peak of nearly 1 billion calls in February 2025. Total blockchain-level requests, including transaction simulations, averaged an additional 350 million per month.
- Since its January 2025 launch , the $GPS token has registered over $5B in total spot volume and $10B in derivatives volume in 2025. Monthly spot volume peaked in March 2025 at over $1.1B , while derivatives volume peaked the same month at over $4B.
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Coinbase Sees Crypto Recovery Ahead as Liquidity Improves and Fed Rate Cut Odds Climb
The crypto exchange also took note of a so-called AI bubble that continues to go strong and a weaker U.S. dollar.
What to know:
- Coinbase Institutional is seeing a potential December recovery in crypto, citing improving liquidity and a shift in macroeconomic conditions that could favor risk assets like bitcoin.
- The firm's optimism is driven by rising odds of Federal Reserve rate cuts, with markets pricing in a 93% chance easing next week, and improving liquidity conditions.
- Several recent institutional developments, including Vanguard's crypto ETF policy reversal and Bank of America's greenlighting of crypto allocations, have contributed to bitcoin's rebound from recent lows.
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