The U.S. Federal Reserve has kept its benchmark interest rate in the range of 4,25–4,50% per annum. This marks the fourth consecutive pause. Despite slowing inflation, the central bank made it clear that two rate cuts are still expected before the end of 2025 consistent with the projection made in March.
The Fed’s statement emphasized that the economy remains stable, though inflation risks persist. According to updated projections, the PCE index, the Fed’s key inflation gauge, is expected to rise to 3%, up from the previous estimate of 2,7%. Unemployment is now forecast at 4,5% (previously 4,4%), while GDP growth is expected to slow from 1,7% to 1,4%.
Powell: “We’re Just Waiting”
Fed Chair Jerome Powell stated at a press conference that the regulator is continuing to assess the situation and is not yet ready to name the timing of the first rate cut. He noted that FOMC participants “are not very confident in their forecasts” and warned that the so-called “dot plot” is not a plan, but a scenario.
“As long as the economy shows resilience, the labor market remains strong, and inflation is declining, we believe it’s appropriate to wait,” Powell said.
He also declined to comment on his future beyond the end of his term in 2026.
Political Pressure Is Mounting
Following the Fed’s decision, President Donald Trump sharply criticized Powell’s actions. He claimed the Fed Chair is “a real dummy” who is “costing America billions.” According to Trump, Europe has already cut rates ten times, while the U.S. has not made a single move. Something he says is “destroying the economy.”
Trump’s criticism of Powell is nothing new: he has repeatedly accused the regulator of being too slow. However, as Senator Elizabeth Warren previously warned, any attempt to remove Powell could cause serious disruption in financial markets.
What This Means for Crypto
Analysts say the Fed’s decision to delay rate cuts due to inflationary pressures could dampen short-term growth in the crypto market. On the other hand, the ongoing risk of U.S. dollar devaluation may renew interest in cryptocurrencies as inflation-hedging assets.
In the coming weeks, key drivers for BTC and other digital assets will be macroeconomic data on inflation, employment, and Fed commentary. As the regulator maintains its cautious stance, markets are likely to react to every new data point.
This post is for informational purposes only and is not an ad or investment advice. Please do your own research making any decisions.