Fed Likely to Keep Rates Steady at 425-450 Basis Points in June

The Federal Open Market Committee (FOMC) is set to meet on June 17–18, 2025, with market participants eagerly awaiting any potential adjustments to interest rates. The likelihood of the Federal Reserve maintaining steady rates has risen to 99.9%, with only a 0.1% chance of an interest rate cut before the meeting. This sentiment is mirrored by Polymarket users, who predict a 98% chance that the Fed will not implement any rate cut changes on June 18. The market now anticipates rates to remain between 425–450 basis points, influenced by recent inflation and jobs data.

The crypto market is bracing for the FOMC decision, with many analysts and traders expecting the Fed to keep rates unchanged. This expectation is grounded in current economic indicators, which indicate that inflation remains a concern and the labor market is stable. The Fed's decision will have significant implications for risk-on assets, including cryptocurrencies. If the Fed maintains its current stance, it could signal continued support for assets like Bitcoin and the broader crypto market.

Bitcoin is currently hovering above $108,000, with a 2% gain in the past 24 hours. The overall crypto market valuation stands at a solid $3.38 trillion. However, as investors prepare for the upcoming FOMC meeting, expectations for interest rate cuts have been tempered. Recent strong job data and persistent inflation have made the Fed cautious, reducing the likelihood of rate cuts. The CME FedWatch Tool indicates a 99.9% chance that the Fed will keep rates steady in June, with only a 0.1% chance of a 25 basis point cut. Looking ahead to July, the odds of a rate cut are just 14.5%, a significant shift from the higher chances seen in May.

Despite external pressures, including calls for rate cuts from the European Central Bank and former U.S. President Donald Trump, the Fed remains steadfast in its approach. Officials are closely monitoring the impact of tariffs and inflation on the economy before making any significant moves. As a result, interest rates are expected to stay within the 425–450 basis points range for the foreseeable future.

The crypto market is experiencing a mix of optimism and caution. Bitcoin and gold are showing strength, with some traders shifting out of the U.S. dollar into riskier assets like crypto. This trend is helping to keep Bitcoin's price elevated. However, there are also bearish signals, such as a potential "Head and Shoulders" pattern on Bitcoin's chart, which could pull prices down to around $92,000 if it materializes. With the FOMC meeting and upcoming inflation data, the crypto market is navigating a delicate balance between optimism and caution.