The Federal Reserve holds rates steady at 5.25%-5.50 unanimously.
Followed by the unchanged rate cut, BTC fell over 3%.
The United States announced the Fed rate has kept steady at 5.25%–5.50% on Wednesday. Federal Reserve Chair, Jerome Powell, signals a rate cut during the September meeting. This could happen if economic data continues at the proper pace.
The Powell-led panel ended its fifth policy-setting meeting for 2024 on July 31. They unanimously voted to keep the policy rate at its 23-year high. The U.S. central bank has maintained borrowing rates steady for one year. The Federal Open Market Committee (FOMC) convenes eight times a year to formulate monetary policies. The next meeting is scheduled for September 17–18, 2024. Overall, there is an 85% chance that the Fed will cut rates in September.
The latest inflation in the United States for June stands at 3% annually, indicating a moderation compared to the 2.7% recorded in May. The downtrend is found with caution by the FOMC, which reaffirms its obligation to bring inflation back to the 2% target.
Further, Powell explained how often the Fed might reduce rates in the coming months. “I can imagine a scenario in which it would be everywhere from zero cuts to several cuts by the end of this year,” he said.
Correlation with Fed Rate Cut and Crypto
Bitcoin (BTC) has fallen over 3% below $65K in the last 24 hours, followed by the Federal Reserve announcing its unchanged rate. Stocks and cryptocurrency undergo notable volatility as rates are raised. If the federal rate cut occurs, a potential positive impact for both crypto assets like Bitcoin (BTC) and stocks is expected. Lower interest rates have been favorable for cryptocurrencies as investors seek high-yielding assets.
As per Santiment’s analysis, once the initial emotional selloffs subside, the crypto markets are likely to stabilize unless another incident shakes crypto. If aggressive accumulation by large whales continues and the overall impression remains negative, it could set a market-wide rebound.
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