The US Federal Reserve has been stable at 4.25%-4.50% in the FOMC decision on June 18, marking its fourth consecutive moratorium since December 2024.
The market was widely anticipated this movement. CME FedWatch data showed a 99.9% chance of rate hold heading to a meeting. Cooling inflation, a resilient labor market and ongoing trade-related price risks have shaped the decisions.
Fed interest rates continue to irritate the US market
Bitcoin held nearly $105,000 after its announcement, and Ethereum traded nearly $2,500. However, as the Fed strengthens its higher length posture, the wider code sentiment may weaken.
In addition to the decision, the Fed has released an updated overview of economic forecasts and dot plots.
FOMC participants are only looking for a rate cut in 2025, starting from the two predicted in March. Most policymakers continue to match their 2025 forecasts with current levels, indicating that tougher policies will last longer.
The dot plot also showed a slow path to normalization.
In 2026, the majority expect prices to be around 3.25% to 3.50%. By 2027, the projection had converged to 2.75%-3.00%, approaching the long-term neutrality rate of the Fed. The long-term dots remained close to 2.5%, suggesting there is no significant change in structural expectations.
This marks a notable Hawkish shift. Only four participants who predicted reductions in 2025 highlighted the Fed’s attention amid sticky service inflation and tariff-driven pricing risks.
Less cuts this year means capital will remain expensive. This reduces liquidity into speculative assets such as Altcoins and Defi Tokens. The stronger dollar narrative also puts pressure on the code valuation.
Bitcoin control could rise in the short term as institutional traders take risks from Altcoins and turn into high-quality assets. At the same time, interest may increase in yield generation products such as stained ETH and tokenized US Treasury.
Unless economic data deteriorates or inflation softens sharply, the crypto market is unlikely to see a major advantage from the Fed’s policies in the near future.
The Fed was last raised in July 2023. Since then, inflation has steadily declined from 5.3% to 2.4% as of June, approaching the Fed’s 2% target. However, inflation and tariff-related costs of services remain sticky.
The crypto market is particularly sensitive to Fed signals. Low rates typically increase liquidity, increase the risk of an appetite, and drive capital to Bitcoin, Ethereum and altcoin.
Conversely, long-term luxury environments limit the likelihood of rising.
Rate policy is also becoming a political issue as the Iran-Israel conflict intensifies economic concerns. Donald Trump has put openly pressured the Fed to cut faster, while current policymakers remained cautious.
Going forward, the FOMC meeting on July 31st may be dependent on June inflation and employment data. For now, Crypto Traders will analyze all Powell’s words for guidance on the Fed’s timing and for tolerance for market volatility.
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