The Federal Reserve has updated its forecast for 2025, lowering expected GDP growth to 1.4% and raising inflation expectations to 3%. These changes raise concerns in financial markets, including the cryptocurrency sector.
Updated Fed Forecast
The Federal Reserve has made changes to its economic projections, observing current economic challenges. The reduction of GDP growth forecast to 1.4% and the increase of inflation expectations to 3% highlight continued economic issues. Chairman Jerome Powell emphasized the need to monitor inflation risks.
Impact on Cryptocurrencies
The updated forecast may lead to increased volatility in the cryptocurrency market, causing caution among investors. Bitcoin (BTC) and Ethereum (ETH) are coming under scrutiny as market participants adjust to the Fed's new forecast. Traders are likely to maintain a risk-averse position as these economic changes unfold.
Historical Trends and Digital Assets
The previous Fed tightening cycle in 2022-2023 led to a more than 50% drop in major crypto asset values, demonstrating how macroeconomic policies can significantly impact digital asset markets.
The Federal Reserve continues to face challenges in the economy, significantly impacting growth forecasts and inflation expectations. These changes raise concerns across both traditional and digital asset markets.
