Former Atlanta Federal Reserve President Dennis Lockhart supports interest rate cuts this year but is skeptical about a reduction in September. In a recent CNBC interview, Lockhart discussed persistent inflation and the Federal Reserve's current actions in response to market conditions.

When asked about the positive Consumer Price Index (CPI) data and signs of easing inflation, he mentioned that the report was favorable without raising major concerns. However, he pointed out that inflation data can be erratic month to month.

"The CPI report was somewhat positive and didn't raise any alarms. It suggests a moderation in inflation, as you mentioned. Inflation numbers can be noisy, and month-to-month variations make it hard to discern the trend," Lockhart said.

Lockhart Supports a Cautious Approach

He further explained that the Federal Reserve would adopt a cautious approach, as Chairman Jerome Powell previously indicated. Given the current numbers, Lockhart thinks a rate cut in September is unlikely but predicts one or two reductions later in the year.

Many crypto and traditional finance analysts have forecasted a rate cut in September, considering the increasingly bullish macroeconomic factors and the downward trend in inflation. Jacob Mitchell, founder of Antipodes Partners, also pointed to data suggesting rate cuts in September.

Other financial institutions like Morgan Stanley have moved their rate cut expectations to July as economic conditions improve. Several crypto traders share this timeframe.

Effect on Crypto Markets

Interest rate cuts by the Federal Reserve are expected to boost market sentiment, prompting investors to pour more funds into riskier assets. The recent CPI data has already sparked bullish trends in Bitcoin, altcoins, and meme coins. Currently, Bitcoin's price is $67,173, reflecting an 11% increase over the past week.

A delay in interest rate cuts could affect the potential for a bull run anticipated by crypto market participants.