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Fed Holds Steady, Markets Anticipate June Cut

Coin WorldWednesday, Jan 29, 2025 4:26 pm ET

1min read

Institution: FOMC Statement Interpreted as Moderately Hawkish

The Federal Open Market Committee (FOMC) of the Federal Reserve System (the Fed) has released its latest statement, which is being interpreted as moderately hawkish by market participants. This interpretation is based on the Fed's decision to keep interest rates unchanged and the removal of language acknowledging progress on inflation from its statement.

The Fed maintained interest rates at 4.25%-4.50%, avoiding commitments on future cuts while removing prior language on inflation progress. This move suggests that the Fed is not rushing to cut rates and is comfortable with the current rate stance. The Fed also noted solid economic growth and stable low unemployment levels, indicating no immediate need for rate cuts.

Market expectations for monetary easing remain active, with the CME FedWatch tool indicating a 46.5% probability of a 25-basis-point rate cut in June and a 43.5% chance in July. However, markets are pricing in less than a 40% probability of additional cuts, suggesting expectations for at most two rate cuts in 2025.

Powell: Swift Interest Rate Reductions Could Hinder Inflation: Cryptocurrency Market Impact

Fed Chair Jerome Powell has warned that swift interest rate reductions could hinder inflation. This statement has sparked renewed inflation concerns and impacted the cryptocurrency market. Bitcoin briefly fell below $102,000 following the Fed's announcement but has since recovered to trade just below $102,000.

Powell: Rate Cut Should Only Be Considered in Case of Inflation Resistance or Weak Employment

Federal Reserve Chairman Jerome Powell stated that the Fed currently needs to see substantial progress on inflation or a deterioration in the labor market to consider a rate cut. However, inflation data has delivered positive signals for the past two months. This suggests that the Fed is unlikely to cut rates in the near future unless there is a significant change in economic conditions.

Fed Holds Steady on Interest Rates: Impact on Cryptocurrency Market

The Fed has held steady on interest rates, with the benchmark fed funds rate range remaining at 4.25%-4.50%. The central bank noted that inflation remains "somewhat elevated," and Fed Chair Jerome Powell's post-meeting press conference is

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