The United States Federal Reserve March 2025 FOMC Meeting kicked off today, with the broader market on the edge of whether a new interest rate policy will be announced. Over the past few weeks, market reactions, including sentiment from crypto investors, have shifted in the opposite direction from inflation readings. With the FOMC meeting ending on March 19, many remain unsure about the likely direction of interest rates.
FOMC Meeting: Key Expectations
At the moment, crypto investors expect the Feds to keep rates unchanged after the FOMC meeting. Many market experts have further predicted that the Jerome Powell-led Federal Reserve may not lower interest rates this year.
The expectation ahead of the Feds’ interest rates decision meeting has long been forecasted before today. Since President Donald Trump’s inauguration, the US economy has faced extreme situations over the past few weeks.
One of the major headwinds the Fed officials will analyze at the FOMC Meeting is the Trump-induced tariff war. With uncertainties in the North American trade war, the fear of inflation remained elevated at the start of the month.
However, the US CPI figures released earlier showed a drop from 3.1% to 2.8%, a sign of inflation cooling off. This market reading may play a key role as officials decide the economy’s next path.
Crypto Market and Gold Outlook
The crypto market has witnessed extreme volatility in anticipation of the March 2025 FOMC Meeting. According to CoinMarketCap data, Bitcoin’s price hovered around $81,374.59 after it dropped 3.42% in 24 hours.
While the macroeconomic outlook has always impacted BTC price, the performance of Gold is placing the market under pressure. The Gold price breakout above $3,025 has made investors question the role of Bitcoin as a hedge against inflation.
Bitcoin price has acted more as a risk-on asset with a strong correlation with the US stock market. If the outlook does not change in the short term, investors might reevaluate their long-term hedge pivot.
Interest Rate and Impact on the Market
Interest rate sentiment has historically influenced BTC and the broader crypto market. With the latest outlook, three scenarios are expected: keeping benchmark rates unchanged, cutting, or raising them.
Notably, the same rates will likely stem the market volatility in the short term. Cutting rates will make crypto assets more attractive compared to benchmark assets, while hiking rates will result in the opposite situation.
However, the core Bitcoin proponents have often advocated a longer-term hold for the coin. Using different models, experts believe the strategic Bitcoin reserve pivot by the US and other governments can boost its appeal in the long term.
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