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crypto.news 2025-05-06 19:51:44

Federal Reserve meeting looms: Will Powell’s tone push Bitcoin higher?

As the Federal Reserve’s Federal Open Market Committee convenes tomorrow, the crypto market appears to be at a crossroads, with investors keenly awaiting signals that could influence digital asset valuations. Currently, the consensus among analysts suggests a high probability that the Fed will maintain its benchmark interest rate within the 4.25%–4.5% range, reflecting ongoing concerns about inflation and economic stability. Bitcoin ( BTC ) has exhibited resilience ahead of the meeting, trading around $95,000, while Ethereum ( ETH ) hovers near $1,787. However, the broader crypto market remains sensitive to macroeconomic cues, particularly those emanating from the Fed’s policy decisions. Market participants are closely monitoring Fed Chair Jerome Powell’s statements for indications of the central bank’s future policy trajectory. A dovish tone, suggesting potential rate cuts or a slowdown in quantitative tightening, could inject optimism into the crypto market, potentially propelling Bitcoin past the $100,000 mark and invigorating altcoin performance. Conversely, a hawkish stance emphasizing persistent inflation concerns and a commitment to tight monetary policy may exert downward pressure on cryptocurrencies, with Bitcoin potentially retesting support levels around $89,000. You might also like: Canada-listed SOL Strategies buys more Solana Trade war and inflation concerns Despite stronger-than-expected job growth and rising consumer prices, the Fed is unlikely to move rates, resisting pressure from President Trump, who publicly called for rate cuts to offset what he described as nonexistent inflation. The Fed, which operates independently from the White House, faces complications from new tariffs that could further fuel inflation. Economists warn that trade tensions may continue to drive up prices, particularly affecting lower-income Americans. Consumers are already feeling the strain of high borrowing costs and inflation on their daily expenses. Markets currently anticipate the Fed will begin cutting rates in July, potentially followed by two or three additional cuts by year-end. If rates are lowered, consumers could see relief through reduced interest rates on loans and credit, improving access to cheaper borrowing. You might also like: New Hampshire becomes first state to authorize Bitcoin and crypto investments

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