Chairman Jerome Powell's announcement regarding no interest rate cuts in 2025 has caused significant volatility in the cryptocurrency market.
Details of Fed's Announcement
On June 18, 2025, Jerome Powell announced that the Federal Reserve would not implement interest rate cuts for 2025. This decision is linked to rising inflation concerns and a cautious monetary policy approach, influencing investor sentiment towards high-risk assets.
Market Reaction to News
Following Powell's announcement, cryptocurrencies experienced a notable downturn, with Bitcoin dropping 2.5% and Ethereum by 3.1%. The market also witnessed a broader decline, impacting major altcoins such as Solana and Cardano as investors shifted towards more stable assets.
Cryptocurrency Outlook in Rate Stability
Historically, periods of Fed tightening, such as in 2018–2019 and 2022, have had adverse effects on the crypto market. Given the current scenario, the potential continued stability of interest rates may exert ongoing pressure on high-risk sectors, including cryptocurrencies.
The announcement of sustained interest rate levels could have prolonged implications for the crypto market, increasing risks for investors and prompting a reassessment of investment strategies. The long-term resilience of the cryptocurrency industry remains uncertain.
