The U.S. Federal Reserve's decision to keep the interest rate steady at 4.25%-4.50% was anticipated by analysts. This decision has implications for the cryptocurrency market, including Bitcoin.
Fed Holds Interest Rate Unchanged
The Federal Reserve decided to maintain its interest rate within the 4.25%-4.50% range, a move expected by the Polymarket prediction market with a 99% probability. Officials noted increased uncertainty around the economic outlook, indicating a cautious approach as they address concerns about inflation and economic growth.
Rate Cut Projections Shift
Several Fed officials no longer expect rate cuts in 2025, marking a shift in projections. The median forecast suggests a 50 basis-point reduction by year-end, though this remains uncertain amid evolving conditions. GDP growth forecast for 2025 has been downgraded to 1.7%, signaling weaker economic prospects for the U.S.
Economists' Views on Fed's Policy
Economist Mohamed El-Erian noted that the Fed paused quantitative tightening and adjusted inflation and growth forecasts. Diane Swonk from KPMG remains skeptical about near-term policy shifts, predicting that rate cuts are unlikely until 2026.
The Fed's decision keeps Bitcoin stable as the market appears to have priced it in already. Future Fed meetings remain highly anticipated as investors look for guidance on the direction of interest rates.
