The institution maintained the interest rate between 5.25% and 5.50%, marking its sixth Fed meeting. However, the Fed stated that rate cuts would not be appropriate until more confidence is ensured in inflation moving towards 2%.

As stated in the Fed’s policy statement, the expected progress towards the 2% inflation target has not been achieved in recent months. The situation may require the Fed to adopt a more cautious and possibly longer-term approach in its interest rate policy.

Cautious Stance Continues

During the press conference, Powell mentioned that the expected progress in the first quarter was not seen, indicating that reaching the confidence level might take longer. This shows that the Fed may need more data and time before making a decision on rate cuts.

Powell’s statements suggest that the Fed may continue to adopt a more cautious and patient stance in its interest rate policy, indicating a return to the "higher rates for longer" approach.

Post-Decision Bitcoin and Cryptocurrencies

An hour after the Fed’s interest rate decision was announced, meme coins saw a slight recovery. Bonk (BONK), Floki Inu (FLOKI), and dogwifhat (WIF) gained about 6% in value. During this period, Bitcoin and Ethereum exhibited a relatively stable performance.

In the last two days, Bitcoin experienced a sharp decline, dropping from $64,700 to $56,500, a loss of over 12%. This drop carried April’s losses into May and signaled a challenging second quarter. After the Fed’s statements, Bitcoin reclaimed the $58,000 level but soon showed it was still under significant selling pressure. Ethereum also rose slightly, but at the time of writing, it had fallen below the $3000 level.

The Fed’s stance on “higher rates for a longer period” and the negative flows from US Bitcoin ETFs will be quite interesting to see whether Bitcoin can reclaim its low range around $60,800.

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The post first appeared on COINTURK NEWS: Fed Maintains Interest Rates Steady