Key Points
- The US Federal Reserve has maintained its interest rate, citing lack of progress towards a 2% inflation target.
- Bitcoin and Ethereum saw a modest recovery following the Fed meeting, but remain under pressure.
The US Federal Reserve has once again chosen to keep its interest rates unchanged. This decision was made due to the lack of further progress towards the agency’s 2% inflation target.
Fed’s Interest Rate Decision
The Federal Reserve’s decision marks the sixth time the agency has maintained its interest rate at 5.25% – 5.50%. The agency has stated that they will not consider rate cuts until there is greater confidence that inflation is on track to reach 2%.
Fed chair Jerome Powell, when asked about potential rate cuts later in the year, stated that the first quarter did not show significant progress. Therefore, it appears it will take longer to reach the desired level of confidence.
Cryptocurrency Market Reaction
Following the Fed’s decision, memecoins led a slight recovery, with Bonk [BONK], Floki Inu [FLOKI], and dogwifhat [WIF] showing a 6% recovery. Both Bitcoin and Ethereum also recorded a modest flip.
However, Bitcoin, which had previously slumped by over 12%, only managed to reclaim $58K before dropping again, indicating continued sell pressure. Ethereum also saw an uptick but was unable to break past the $3000 level.
The Federal Reserve’s “higher for longer” stance, coupled with negative flows from US Bitcoin ETFs, could influence whether Bitcoin can reclaim the range-low around $60.8K.
