Fed’s steady Interest Rates Cause Bitcoin Stagnation
President Trump accused Fed chair Jerome Powell of being the “WORST” for not cutting interest rates.Trump, via Truth Social, cited an analysis from Fannie Mae and Freddie Mac’s regulator, suggesting Powell should resign if he maintains the current rates.
The Fed decided to keep interest rates between 4.25% and 4.5%, causing Bitcoin to stagnate around $104,000. As this proclamation in June, BTC has seen negligible gains of 0.28% to 0.1%, frustrating traders.
Jerome Powell justified the decision, stating the Fed needs more time to understand the impact of Trump’s tariffs on inflation. He warns that it’s challenging to react confidently until the extent of these effects is known.
- The Fed also revised its economic growth forecast for 2025, showing a decline.
- The inflation forecast for 2025 rose to 3%, exceeding the Fed’s 2% target.
These decisions caused a dip in U.S. stocks and the overall crypto market cap,wich decreased by 2.3% in 24 hours. Bitcoin, Ethereum, and Solana saw declines ranging from 1.6% to 0.2%.
Crypto trading volume also fell by 15%, from $120 billion to $101 billion. The central bank forecasts two interest rate cuts by the end of the year, matching its March prediction.
Despite mounting pressure from the White House to lower rates by two points, Powell remains steadfast. He asserts the Fed is “well positioned to wait” before considering any policy changes.
