The Federal reserve omission of inflation references in its statement suggests a shift toward monitoring progress toward the 2% target.
Subsequent to its two-day Federal Open Market Committee (FOMC) meeting, the United States Federal Reserve has resolved to maintain the current interest rates.
The Federal Reserve is anticipated to refrain from implementing further reductions in interest rates for the majority of this year, subsequent to three successive rate cuts that occurred in the previous year.
Federal Reserve Keeps Rates Unchanged
In a recent press release, the Federal Reserve declared its decision to maintain interest rates within the range of 4.25% to 4.5%. This decision aligns with anticipations, as speculators estimated a 99.5% probability that the Federal Reserve would arrive at this conclusion.
All twelve members of the committee cast their votes in favor of maintaining the current tariffs. This development occurs notwithstanding the appeals from U.S. President Donald Trump for the Federal Reserve to reduce interest rates while simultaneously reiterating his dedication to establishing the United States as the preeminent hub for cryptocurrency.
The Federal Reserve’s decision to maintain interest rates at their current levels is of considerable importance to the cryptocurrency market, as this action may engender a bearish sentiment among investors.
In such circumstances, investors are less inclined to allocate capital to risk assets, such as cryptocurrencies, particularly when the Federal Reserve adopts a hawkish stance.
Attention will now be directed to the address delivered by Federal Reserve Chair Jerome Powell, as it will elucidate the current stance of the US Central Bank concerning its economic outlook.
The cryptocurrency market may experience a substantial resurgence should Powell convey a dovish outlook from the Federal Reserve during his address.
Nevertheless, the price of Bitcoin is susceptible to further decline should the Federal Reserve Chair adopt a hawkish position. The Federal Reserve left out a reference to inflation in their most recent Federal Open Market Committee (FOMC) statement.
This is a big change that shows they are shifting their attention to their progress toward their goal inflation rate of 2%. This suggests that the Federal Reserve may adopt a conservative position in the future if they genuinely perceive that inflation is once again increasing.
The December report on the Consumer Price Index (CPI) in the United States has already heightened apprehensions regarding escalating inflationary pressures within the nation.
In the interim, subsequent to the Federal Reserve’s decision, market participants now anticipate that the Committee will refrain from reducing interest rates until June.
Following the FOMC meetings in March and May, market participants anticipate that interest rates will remain stable.
