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coinpedia 2025-03-19 18:23:10

Fed Announces No Rate Cut at March FOMC Meeting: How Will Crypto Market React?

The post Fed Announces No Rate Cut at March FOMC Meeting: How Will Crypto Market React? appeared first on Coinpedia Fintech News After concluding Federal Open Market Committee (FOMC) meeting, the US Federal Reserve has released its second policy decision for 2025. The recent press release reveals that the Federal Open Market Committee has chosen to keep interest rates steady, maintaining them in the range of 4.25% to 4.5%. This decision comes after the committee opted to reduce rates three times in succession last year. Fed Sees Two Cuts This Year At the conclusion of the second of the Federal Open Market Committee’s eight scheduled meetings for 2025, which wrapped up on Wednesday, the panel decided to maintain the federal funds rate at the existing target range of 4.25% to 4.5%. In addition to their decision, Federal Reserve officials have revised their interest rate and economic forecasts through to 2027 and adjusted the speed at which they are scaling back bond holdings. Despite uncertainties emerging from President Donald Trump’s tariffs and an aggressive fiscal policy that includes tax cuts and deregulation, the officials anticipate a further reduction in rates by half a percentage point through 2025. The Fed typically adjusts rates in quarter percentage point steps, suggesting two potential rate cuts this year. The FOMC’s post-meeting statement highlighted an increased level of uncertainty in the current economic environment. Jerome Powell acknowledged that recent inflation data indicate considerable progress towards stabilization, yet he highlighted that the central bank’s efforts are ongoing. He stated that interest rates would remain restrictive to counter rising inflation, which is still somewhat elevated. The press release highlighted that recent indicators point to a robust expansion of the economy. It noted that the unemployment rate has remained low and stable in recent months, and conditions in the labor market continue to be strong. Following the announcement, the price of BTC experienced a sharp increase, now hovering around the $85K mark. It has recorded a gain of over 4.4% in the last 24 hours. Overall Crypto Market Remains Stable Cryptocurrency markets experienced minimal turbulence, largely because investors had already priced in the Fed’s decision to leave interest rates untouched. This decision from the Federal Reserve comes amid economic uncertainties fueled by trade tensions early into President Donald Trump’s second term. Trump’s aggressive imposition of tariffs on steel, aluminum, and numerous other imports, has contributed significantly to volatility across global financial markets. Alongside its latest rate announcement, the Fed also revised downward its expectations for economic expansion, signaling a more cautious outlook. Growth forecasts for this year were trimmed to 1.7%, marking a notable 0.4 percentage point drop compared to December’s projection. In contrast, inflation expectations climbed slightly, with core inflation now anticipated to reach a 2.8% annualized rate—up 0.3 percentage point from prior estimates. Interestingly, the Fed’s latest projections, shown in its “dot plot,” suggest a move toward tighter monetary policy compared to December. Previously, only one official expected rate to stay unchanged into 2025, but now four officials share that view, indicating a stronger preference for caution and possibly higher interest rates in the future.

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