The Federal Reserve of the United States is expecting inflation to persist longer than previously anticipated, potentially impacting interest rates and the cryptocurrency market.
Fed's Position on Inflation and Interest Rates
The Federal Reserve has acknowledged that inflation may last longer than initially expected, with tariff policies exerting a considerable economic drag. This suggests a continuation of high interest rates until significant policy changes occur. Elevated rates are likely to lead to higher capital costs. In a Federal Reserve Press Release, it is stated that "the Fed reaffirms its commitment to its dual mandate of stable prices and maximum employment."
Crypto Market Analysis Amid High Rates
The cryptocurrency market may face volatility due to macroeconomic signals. Bitcoin is currently trading at $107,428.84, with a market capitalization of $2.13 trillion and a dominance rate of 62.91%. Over the past 24 hours, trading volume has dipped by 13.04% to $49.04 billion, with a price decline of 1.96%. Meanwhile, the recent 60-day trend shows a 30% increase. The Coincu research team forecasts that continued high rates might suppress crypto rallies, but dovish signals from the Fed could trigger price movements.
Overall Forecasts and Their Significance
Historically, announcements of prolonged inflation have led to significant volatility in both equity and crypto markets. Previous rate guidance stalls in 2022 and 2023 resulted in noticeable fluctuations in Bitcoin and Ethereum prices. Forecasts suggest that shifts in rate expectations could have a substantial impact on BTC and ETH.
Amid continuing inflation, the Federal Reserve is signaling factors that could influence the cryptocurrency market. Society and investors should closely monitor the Fed's future actions and their possible consequences.
