The Federal Reserve has decided to keep interest rates steady at 4.25% to 4.50%, citing uncertainty from President Trump’s tariffs. Updated forecasts suggest two rate cuts in 2025, contrasting earlier projections of four reductions. Following this, Bitcoin and other cryptocurrencies saw slight declines despite previous gains. Inflation metrics indicate a modest easing, while market participants anticipate possible future interest rate cuts.

The Federal Reserve has opted to maintain its interest rates, keeping them steady in a range between 4.25% and 4.50%. This decision, anticipated by many, reflects the ongoing economic uncertainty fueled by U.S. President Donald Trump’s tariffs, which have impacted stocks and cryptocurrencies. The Fed’s wait-and-see posture intends to evaluate how these policies affect inflation and overall economic stability.

An updated forecast from the Federal Reserve indicates expectations for two rate cuts in 2025, which aligns with the projections made by policymakers in December. Previously, there had been indications of up to four rate cuts anticipated this year, but the current sentiment suggests a more measured approach, with no official forecasting more than three cuts this year.

The uncertainty surrounding tariff policies has raised concerns about inflation, potentially hindering U.S. economic growth due to increased costs for consumers and businesses. Following the Fed’s announcement, Bitcoin, which initially rose, experienced a decrease alongside other cryptocurrencies. Despite this, Bitcoin showed a notable gain of 3.2% over the past day, reaching $84,000, while Ethereum and Solana also saw increases of 7.7% and 5%, respectively.

Recently released data indicates that the Consumer Price Index (CPI) rose by 2.8% over the past year, suggesting a modest easing in inflation. Furthermore, the Personal Consumption Expenditures (PCE) index is predicted to demonstrate a 2.7% annual increase, remaining above the Fed’s target of 2%. Market participants are currently divided on the likelihood of the Fed cutting rates in June, with futures traders estimating a 51% chance of such a move.

In summary, the Federal Reserve’s decision to hold interest rates steady reflects ongoing economic uncertainties linked to tariff policies. Analysts predict two rate cuts in 2025, instead of the previously estimated cuts, indicating a conservative outlook on economic recovery. Cryptocurrencies experienced fluctuations based on the Fed’s announcements, while inflation metrics suggest a gradual easing, but still above target levels. Market speculation continues regarding potential future rate cuts as indicators evolve.

Original Source: decrypt.co

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