Following its 2-day FOMC meeting, the US Federal Reserve has decided to keep interest rates unchanged. The Fed is expected to hold off on cutting rates for the most part of this year following three consecutive rate cuts last year.
FOMC: Federal Reserve Keeps Rates Unchanged
In a press release, the Federal Reserve announced that it will keep interest rates steady at the 4.25% to 4.5% range. This decision is in line with expectations, as traders predicted that there was a 99.5% chance the Fed would reach this decision. All twelve members of the Committee voted in favor of keeping rates steady.
This comes despite calls from US President Donald Trump for the Fed to lower rates while reaffirming his commitment to make the US the crypto capital. The Fed’s decision to keep interest rates unchanged is significant for the crypto market, considering how such a move could create a bearish sentiment among investors.
Investors are less likely to invest in risk assets like cryptocurrencies in such situations, especially if the Fed is hawkish. Now, all eyes will be on the Federal Reserve Chair Jerome Powell’s speech to determine where the US Central Bank stands regarding its outlook on the economy.
The crypto market could witness a significant rebound if Powell projects a dovish stance from the Fed in his speech. However, the Bitcoin price risks another decline if the Fed Chair projects a hawkish stance.
Some Notables Following The FOMC Meeting
One notable change from the latest FOMC statement is the Federal Reserve dropping the reference to inflation, making progress to their desired target of 2%. This indicates the Fed may take a hawkish stance going forward if they indeed believe inflation is again on the rise. The December US CPI report had already raised concerns of rising inflationary pressure in the country.
Meanwhile, following the Fed’s decision, traders now expect that the Committee will wait until June to cut rates. In line with this, interest rates are likely to remain steady following the March and May FOMC meetings.
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