Crypto markets positively reacted to the Federal Open Market Committee's decision to keep interest rates unchanged.
Crypto Markets' Reaction to Fed Policy
The FOMC's decision to maintain interest rates had a positive impact on crypto markets. Bitcoin rose by 3%, with Ethereum and XRP gaining 3.9% and 7% respectively. According to CoinGecko, Bitcoin peaked at $87,427. Other altcoins such as Solana and BNB also showed positive momentum. The Binance memecoin, CZSDog Broccoli, surged by 80% on intraday trading.
Fed Maintains Interest Rates
The Federal Reserve maintained its benchmark interest rate at 4.25%–4.5% for the second consecutive meeting, despite signs of inflation and slower economic growth. Fed Chair Jerome Powell dismissed recession fears, citing temporary factors like Trump tariffs. He also highlighted continued economic expansion and stable unemployment data.
Future Interest Rate Changes
The Fed projects two rate cuts later this year, though some officials see fewer cuts. Rates are expected to drop to 3.75%–4.00% by the end of 2025 and to 3.00% by 2027.
The Fed's decision to maintain rates supported crypto markets, indicating potential future changes. The Fed is expected to continue supporting economic growth amidst uncertainty.
