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Cryptocurrencies experienced a significant day as the Fed announced its interest rate decision. The announcement and Powell’s statements 30 minutes afterward are crucial. As with every Fed meeting, we will discuss the details of the decision and its potential impact on cryptocurrencies.
May 7 Fed Interest Rate Decision
JPMorgan declared moments before the interest rate decision that the likelihood of the Fed making a wrong policy choice was extremely low. It also stressed that there was no major short-selling opportunity for big companies in the U.S. markets. Expectations for this meeting and June were that rates would remain unchanged.
BTC reached up to $97,732 shortly before the meeting but hovered around $96,600 as the meeting began. As expected, the Fed kept interest rates unchanged, and here are the important details from the announcement:
- The Fed left interest rates unchanged.
- The Fed stated that risks of higher unemployment and inflation are rising.
- The Fed noted strong economic activity despite export fluctuations affecting data.
- Inflation continues to be somewhat elevated.
- Unemployment remains stable at low levels, with robust labor market conditions.
Trump’s statement about not being open to lifting tariffs on China caused a slight blow to BTC. The interest rate decision arrived as expected. Investors anticipate that the Fed might reduce rates in July.
“I’m not looking for too much tariff exemption; I’m not open to retracting 145% tariffs.” – Trump
Investors are pricing in three rate cuts this year. Powell’s statements will be closely monitored and shared in real-time.
