The U.S. Federal Reserve has decided to maintain its current interest rates amid ongoing inflationary pressures and tariff impacts.
Fed Signals No Rate Cuts
Federal Reserve Chair Jerome Powell stated that interest rates will remain unchanged due to persistent inflation and tariff impacts. Although inflation is lower than in 2022, it remains elevated, with a year-over-year core PCE between 2.6% and 3.1%.
The Fed's stance has shifted market expectations, pushing anticipated rate cuts to the end of 2025. Powell remarked, “The Fed won't cut interest rates until it has a better understanding of how higher tariffs affect longer-term inflation expectations.”
Impact of Tariffs on Crypto Market
The crypto market has responded cautiously to the Fed's decisions. As of July 30, Bitcoin's price was at $117,038.30, with a reported market cap of $2.33 trillion and 60.81% dominance. Over the past week, Bitcoin has experienced a 0.87% decline. Traders remain cautious amid ongoing discussions on monetary policy, noting that historically, new U.S. tariffs have led to initial inflation spikes and subsequent weakening sentiment across equity and crypto markets.
Market Reaction to Monetary Policy Analysis
Insights from the Coincu research team indicate that while Bitcoin remains a key indicator of risk sentiment, any regulatory shifts or escalations in tariffs may further exacerbate market volatility in the short term. The long-term implications will hinge on the effective management of inflation in relation to U.S. monetary policies.
In summary, the Fed's decision to maintain rates has shifted market expectations and prompted a cautious response from traders. The future impact on the economy and the crypto market remains to be seen.
