The leading cryptocurrency, Bitcoin (BTC), is struggling around $70,000 amid the uncertainty and tension created by the US-Iran conflict.
The war between the two countries has driven up oil prices, indirectly increasing inflation concerns. Analysts worry that inflation, which the US Federal Reserve (FED) has long been trying to bring down to its 2 percent target, may come under renewed upward pressure with this increase in energy prices.
While there is talk at this point that the Fed might even raise interest rates in the face of inflation risk, there are differing opinions and expectations regarding the Fed’s interest rate decisions.
While it is even expected that the Fed will not cut interest rates at all in 2026, international credit rating agency Fitch has announced its expectations for the Fed.
In its latest report, Fitch stated that the labor market has cooled and wage growth has slowed, which could lead the Fed to cut interest rates twice in 2026.
In this context, Fitch forecasts that US consumption will slow in 2026. Weakness in the labor market will put pressure on household income. As a result, a cooling labor market and slowing wage growth will prompt the Fed to take action.
*This is not investment advice.